AHIP report blames hospitals for rising prices

America's Health Insurance Plans, under fire for rising policy premiums, is touting a new study that shifts the responsibility for climbing prices to the hospital sector.

A report from AHIP researchers, published in the March issue of the American Journal of Managed Care, found that hospital inpatient prices increased 8.2% per year between 2008 and 2010. They attributed 1.3 to 1.9 percentage points of that increase to more-complex care and a greater number of procedures.

It also found significant differences in pricing growth among states and metropolitan areas.

The study also comes on the heels of a report card from the Catalyst for Payment Reform and the Health Care Incentives Improvement Institute, which gave 29 states an F for pricing transparency and seven states a D.

The authors of the AHIP study similarly wrote that there is “surprisingly little detailed public information” on the prices commercial insurers pay for hospital inpatient care, despite the “keen interest” in healthcare costs.

The states with the highest annual increases in inpatient prices were New York (10.5%), Texas (9.3%) and Tennessee (8.8%). Metro areas with the highest annual increases were Buffalo-Niagara Falls, N.Y. (14.4%); Kansas City, Mo./Kan. (11.8%); and Boise-Nampa, Idaho (11.3%).

The report also looked at price increases across procedures and found that the highest annual price increases were for spinal fusions (15.2%), bronchitis and asthma treatments (10.3%) and uterine laparoscopic procedures for nonmalignant indications (9.8%).

In a news release, AHIP President and CEO Karen Ignagni pegged healthcare prices as the “major driver of overall healthcare cost growth,” adding, “To make healthcare coverage more affordable for consumers and employers, there needs to be a much greater focus on the underlying cost of medical care.”

Explaining insurance premium increases has been one of the key issues for AHIP as the insurance industry becomes increasingly regulated under healthcare reform. The insurer trade group cites government data showing that payers' administrative costs have declined for six consecutive years and attributing two-thirds of the increase in health spending to price increases.