Analyzing Health Care Spending and Prices in New York StateNYHealth awarded the Health Care Cost Institute a grant to examine health care spending patterns and growth in New York State.
Health Care Cost Institute
Empowering Health Care Consumers
December 2018–January 2021
The health care system is hard to understand and navigate, especially when it comes to information about prices.
In an environment where patients are responsible for an increasing share of health care costs, greater price transparency is needed to empower consumers. NYHealth has supported several projects to promote greater price transparency, including an examination of hospital price variation in New York State and various cost calculator tools to help consumers better plan for health care costs. In 2018, NYHealth awarded the Health Care Cost Institute (HCCI) a grant to improve price transparency by examining health care spending patterns in New York State.
Outcomes and Lessons Learned
- Collaborated with NYHealth’s policy and research department on analyzing its health care claims data as related to the Foundation’s Empowering Health Care Consumers core strategy of improving price transparency.
- Examined health care spending in New York State and the degree to which prices for specific services and drugs account for growth in health care spending over time.
- Evaluated the extent to which there is variation in prices for specific health care services within the same community.
- Produced two reports on these topics in collaboration with NYHealth and shared them with key stakeholders:
Key findings of the statewide analysis of health care spending, prices, and utilization for employer-sponsored coverage include:
- Health care spending per person in New York State was higher than the national average in each year from 2013 to 2017.
- Price growth was the driving factor in health care spending. By comparison, changes in the amount of health care utilized was a much smaller contributor to total health care spending growth.
Key findings of the analysis of childbirth services in 2017 across New York City boroughs include:
- Wide variation in prices exists, with a 30% difference in median prices for vaginal deliveries between Brooklyn ($12,718) and the Bronx ($16,632).
- Substantial variation exists even within communities. The highest-priced deliveries cost more than 13 times the lowest-priced deliveries within each borough of New York City.
- A policy such as capping prices for services has the potential to result in substantial savings. Capping prices at the median or 75th percentile price for a delivery could lower prices per delivery by hundreds, if not thousands, of dollars for a substantial proportion of deliveries.
These findings received significant media attention, including an exclusive Wall Street Journal story on the role of prices in health care spending growth. The research has also been cited by key industry and policy stakeholders, including at a New York City Council public hearing on the reasons for high prices and wide variation in prices for hospital services. In general, this work has helped raise greater awareness of the issue of high and variable prices in health care, and the need for greater transparency in price information.
Co-funding and Additional Funds Leveraged: N/A