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From Health Affairs:


Comparing Quality And Prices Among Hospitals


Bethesda, MD -- With the development of tools such as Hospital Compare, consumers have more ways to contrast the costs and quality of different hospitals. A new study, being released today as a Web First by Health Affairs, explored why some hospitals are more successful at negotiating higher prices than nearby competitors--and linked hospital-specific negotiated private prices with detailed information of hospital characteristics. The study found that high-price hospitals averaged 474 staffed beds--more than double the average number of beds in the low-price hospitals--and had market shares about three times as large as those of low-price hospitals. The high-price hospitals were almost three times as likely to be teaching hospitals, were much more likely to offer specialized facilities and services, and received significantly higher revenues from sources other than patient care. In national rankings of hospitals' reputations, high-price hospitals scored higher, but clinical outcomes measures were mixed. High-price hospitals performed better on one measure of mortality (for patients with heart failure), but performed worse than the low-price hospitals on measures of excess readmissions and on patient-safety indicators, including postsurgical deaths and complications.


Understanding Differences Between High- And Low-Price Hospitals: Implications For Efforts To Rein In Costs


By Chapin White, James D. Reschovsky, and Amelia M. Bond


White is affiliated with RAND; Reschovsky is with Mathematica Policy Institute; and Bond is a PhD candidate at the Wharton School of the University of Pennsylvania.


The study, which was funded by the National Institute for Health Care Reform, will also appear in the February issue of Health Affairs.


The study used 2011 facility claims for current and retired autoworkers and their dependants in ten US metropolitan markets. There were a total of 110 hospitals evaluated in the study, based on 24,187 inpatient stays. "Insurers may face resistance if they attempt to steer patients away from high-price hospitals because they have good reputations and offer specialized services that may be unique in their markets," concluded the authors. "More radical approaches--such as state-based rate setting or restrictions on contracting arrangements between hospitals and health plans--may gain traction."

About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically at The full text of each Health Affairs Web First paper is available free of charge to all website visitors for a one-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund. You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download our podcasts, including monthly Narrative Matters essays, on iTunes. Tap into Health Affairs content with the new iPad app.