The Center for Health Information and Analysis (CHIA) is pleased to release the Baseline Report for Health Care Provider Price Variation in the Massachusetts Commercial Market.
This study of relative prices was conducted pursuant to M.G.L. c. 118G, § 6 and Chapter 288 of the Acts of 2010, which directed the Division of Health Care Finance and Policy (Division) to collect and report on health care provider relative prices. Chapter 224 of the Acts of 2012 dissolved the Division and created CHIA as an independent state agency. CHIA assumed many of the Division’s responsibilities, including the directive to collect, analyze, and report on relative price data. The data collection and analysis for relative prices was conducted by the Division. Due to the timing of Chapter 224 implementation, CHIA is publishing this report.
“Relative price” is a calculated measure that allows for comparison of the price levels that result from negotiations between health care payers and providers within a payer’s network for a standard set of insurance products and services.
Highlights from this report include:
- In every commercial health care payer network, there was a significant variation in prices paid to providers for hospital services and physician services, and less variation in prices paid to most other provider types.
- The degree of price variation differed by commercial health care payer. Payers with larger market shares, as determined by the number of covered members within a payer’s network, generally had less price variation than payers with smaller market shares.
- Acute hospitals with higher relative prices tended to be academic medical centers, teaching hospitals, specialty hospitals, and geographically isolated hospitals. A majority of the acute hospitals that had lower relative prices were community hospitals or hospitals that serve a disproportionate number of publicly funded patients (“DSH” hospitals).
- Total payments from commercial payers were more concentrated in higher priced providers. Higher priced acute hospitals and physician groups accounted for about four out of every five dollars paid by payers to these provider types.
- While many providers had prices that were above average in some networks and below average prices in other networks, certain hospitals and physician groups consistently had higher relative prices or lower relative prices, regardless of payers.
For a copy of this report, please visit http://www.mass.gov/chia/researcher/chia-publications.html#relative_price.