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August 11, 2017 01:00 AM

Private payers tamp down hospital prices in June

Dave Barkholz
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    Consumers are getting some relief on healthcare prices this summer.

    The increase in June was just 1.5% compared with the prior-year period at 1.9%, according to a new report by the Altarum Institute's Center for Sustainable Health Spending.

    Hospitals, whose privately insured patients paid just 1.8% more for services in June compared with the year before led the moderation. That's the smallest monthly increase in that category since Altarum started tracking the private-payer pricing data in June 2014.

    The reason? Consumers are becoming more savvy shoppers, analysts say. And hospitals and other providers are responding by keeping their prices in line with the very low rate of general inflation, said Ani Turner, Altarum's co-director.

    The 1.5% overall healthcare price rise compared with a 1.6% price increase in May.

    Hospital prices in June for all payers rose 1.4%, down from 1.5% in May. Altarum pays close attention to hospital pricing because spending for hospital services represents about one-third of healthcare spending.

    Prices paid for services provided by physicians rose 0.6% in June while prescription prices rose 3.8%. Nursing home prices grew by 3% and durable medical equipment prices fell 0.6%, the data show.

    Healthcare spending, which for some years has risen because of the infusion of newly insured getting care under the Affordable Care Act, was harnessed in June. It rose 4.8% over the prior-year period compared with 4.1% growth in nominal gross domestic product over that time.

    Altarum's macro-economic findings are consistent with what hospitals are seeing on the ground.

    The large investor-owned hospital systems, such as HCA and Tenet Healthcare, said their second-quarter volumes and earnings were dampened, in some cases, by patient enrolled in high deductible plans who chose to forego elective procedures and shopped harder for services.

    All systems pointed to a topping out of newly insured under the Affordable Care Act exchanges and Medicaid expansions as factoring in their results.

    Turner said healthcare's robust hiring in July of 39,400 workers was predominantly in the ambulatory sector to staff for the ongoing shift of care out of the hospital to a less-costly outpatient setting.

    Of the total industry hires, 30,000 were for outpatient care.

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