Understanding Variations in Hospital Costs in Support of Value-Based Care Decisions (2021-2022)

Healthcare expenditure in the United States accounts for nearly one-fifth of the United States gross domestic product, yet healthcare costs remain ambiguous and confusing to patients and clinicians alike. This is due to several features of healthcare markets that make them decidedly different from markets for other types of goods and services, including asymmetry of information, moral hazard due to insurance mechanisms, barriers to entry and highly regulated products. Ultimately, lack of transparency in healthcare pricing makes it difficult for patients to make informed decisions when seeking high-value/low-cost care.

To address this challenge, the Centers for Medicare and Medicaid Services (CMS) introduced a regulation that requires hospitals to publicly post both searchable and machine-readable files of payments by individual, identifiable payers on their websites. This regulation is intended to enable patients, providers and health plans to understand the average net prices for specific types of care in order to reduce some of the informational asymmetry that is ultimately believed to be a driver of high healthcare costs. This new regulation also paves the way for researchers to generate crucial value/cost comparisons to demystify the healthcare market and enable individuals to make informed decisions about their healthcare.

In partnership with Yale University, this project team collected, collated and analyzed newly available healthcare pricing data in order to investigate the impacts of insurance and hospital market concentration, government or commercial payer, hospital type and more on the price of common general surgeries. Their findings will be used by care delivery organizations, patients and policymakers whose roles include antitrust legislation and healthcare system oversight.

Timing

Summer 2021 (optional) – Spring 2022

Team Outputs

How Healthcare Cost Transparency Can Inform Patients and Policymakers (2022 Fortin Foundation Bass Connections Virtual Showcase)

Effect of Hospital and Insurance Market Concentration on Prices for Common Surgical Procedures (poster by Paul Sabharwal, Yuqi Zhang and Marcelo Cerullo, presented at Fortin Foundation Bass Connections Showcase, Duke University, April 13, 2022)

Hospital Characteristics Associated With Observed Transcatheter Aortic Valve Replacement Prices (poster by Roni Ochakovski, Yuqi Zhang and Marcelo Cerullo)

Association Between CMS Price Transparency Compliance and Hospital Characteristics (poster by Xinshi Ma, Yuqi Zhang and Marcelo Cerullo)

Association of Rural Hospital For-Profit Status With Higher Publicly Reported Prices for the Components of Inpatient Hematuria Evaluation Among Commercially Insured Patients. Ian Berger, Vishnukamal Golla, Marcelo Cerullo, Yuqi Zhang, Michael E. Lipkin, Gary J. Faerber, Charles D. Scales, and Deborah R. Kaye. 2023. Urology Practice 10(1).

Healthcare cost.

Team Leaders

  • Marcelo Cerullo, Duke National Clinician Scholar, School of Medicine-Surgery
  • Ryan McDevitt, Fuqua School of Business
  • James Roberts, Arts & Sciences-Economics
  • Yuqi Zhang, Duke National Clinician Scholar, Yale New Haven Hospital-Surgery

/graduate Team Members

  • Seve Gaskin, Masters of Public Policy, Business Administration-MBA
  • Hemal Patel, Medicine MD First Year
  • Emily Peairs, Medicine MD Third Year

/undergraduate Team Members

  • Boone Holliday, Economics (BS), Computer Science (BS2)
  • Xinshi Ma, Economics (BS)
  • Roni Ochakovski
  • Samantha Owusu-Antwi
  • Paul Sabharwal, Computer Science (BS)

/zcommunity Team Members

  • Andrew Esposito, Yale New Haven Hospital-Surgery
  • William Laird, Undergraduate Student, Yale University
  • Haddon Pantel, Yale New Haven Hospital-Colorectal Surgery