Project Transparency: Examining Variations in New York Hospital Prices and Quality of Care
Advancing Primary Care
June 30, 2014
Outside New York State
On both the national and state level, there is growing movement toward health care price transparency and delivery reform.
The Massachusetts Attorney General’s Office issued a 2010 report identifying health care price drivers and market dysfunctions that had led to steep gains in health care costs. The Massachusetts report provided the tipping point for a range of reforms, including omnibus state legislation to foster price competition, the elimination of market distortions, and the promotion of transparency. New York similarly wants to understand the factors behind the escalation in health care costs. Through a close collaboration between NYSHealth and the New York State Department of Financial Services (DFS), DFS will replicate the Massachusetts study of actual hospital prices and cost drivers that lead to higher premiums for New York. NYSHealth awarded Gorman Actuarial a grant to assemble a team of external consultants to assist in the study that will be led by Bela Gorman, who served as the primary consultant on the Massachusetts report.
The New York State study focused on hospital reimbursement—examining contracting practices, price variations, price drivers that impact premiums, and contract provisions that affect the market. The study assessed whether and how quality, case severity, geographic location, market leverage, and other hospital attributes influence hospital prices. The study examined whether higher-priced hospitals are increasing their market shares, as was the finding in Massachusetts. Key tasks performed by the consultants include the review of existing data sources; the definition of study regions; the definition of product lines and financial arrangements; crafting the data request; and data analyses and reporting.