Economics Works

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Analysis of variation in charges and prices paid for vaginal and caesarean section births: a cross-sectional study
(2014) Hsia, Renee Y; Akosa Antwi, Yaa; Weber, Ellerie
This article aims to examine the between-hospital variation of charges and discounted prices for uncomplicated vaginal and caesarean section deliveries, and to determine the institutional and market-level characteristics that influence adjusted charges. Using data from the California Office of Statewide Health Planning and Development (OSHPD), we conducted a cross-sectional study of all privately insured patients admitted to California hospitals in 2011 for uncomplicated vaginal delivery (diagnosis-related group (DRG) 775) or uncomplicated caesarean section (DRG 766). Hospital charges and discounted prices were adjusted for each patient's clinical and demographic characteristics. We analysed 76,766 vaginal deliveries and 32,660 caesarean sections in California in 2011. After adjusting for patient demographic and clinical characteristics, we found that the average California woman could be charged as little as US$3,296 or as much as US$37,227 for a vaginal delivery and US$8,312–US$70,908 for a caesarean section depending on which hospital she was admitted to. The discounted prices were, on an average, 37% of the charges. We found that hospitals in markets with middling competition had significantly lower adjusted charges for vaginal deliveries, while hospitals with higher wage indices and casemixes, as well as for-profit hospitals, had higher adjusted charges. Hospitals in markets with higher uninsurance rates charged significantly less for caesarean sections, while for-profit hospitals and hospitals with higher wage indices charged more. However, the institutional and market-level factors included in our models explained only 35–36% of the between-hospital variation in charges. These results indicate that charges and discounted prices for two common, relatively homogeneous diagnosis groups—uncomplicated vaginal delivery and caesarean section—vary widely between hospitals and are not well explained by observable patient or hospital characteristics.
A bargain at twice the price? California hospital prices in the new millennium.
(2009) Akosa Antwi, Yaa; Gaynor, Martin S.; Vogt, William B.
We use data from California to document and offer possible explanations for the sharp increase in hospital prices charged to private payers after 1999. We find a downward trend in price for private pay patients in the 1990s and a rapid upward trend beginning in 1999, amounting to an annual average increase of 10.6% per year over 1999-2005. Prices in 2006 were almost double prices in 1999. By contrast, there was little discernable trend in prices for Medicare and Medicaid patients, although these prices varied from year-to-year. Surprisingly, the increase in prices is not correlated, geographically, with the change in hospital market concentration. For example, the greatest price rises came from hospitals in monopoly and highly concentrated counties which experienced little or no change over our sample period. Two recent California state hospital regulations, the seismic retrofit mandate and the mandatory nurse staffing ratio affected hospital costs. However, the cost increases due to the nursing staffing regulations are not large enough to account for the price increase, and the price increase is not substantially correlated with the costs of compliance with the seismic retrofit mandate. Therefore, the source of the near-doubling of California hospital prices remains something of a mystery.
A Cross-Sectional Analysis of Variation in Charges and Prices across California for Percutaneous Coronary Intervention
(2014) Hsia, Renee Y.; Akosa Antwi, Yaa; Weber, Ellerie; Nath, Julia Brownell
Though past studies have shown wide variation in aggregate hospital price indices and specific procedures, few have documented or explained such variation for distinct and common episodes of care. We sought to examine the variability in charges for percutaneous coronary intervention (PCI) with a drug-eluting stent and without major complications (MS-DRG-247), and determine whether hospital and market characteristics influenced these charges. We conducted a cross-sectional analysis of adults admitted to California hospitals in 2011 for MS-DRG-247 using patient discharge data from the California Office of Statewide Health Planning and Development. We used a two-part linear regression model to first estimate hospital-specific charges adjusted for patient characteristics, and then examine whether the between-hospital variation in those estimated charges was explained by hospital and market characteristics. Adjusted charges for the average California patient admitted for uncomplicated PCI ranged from $22,047 to $165,386 (median: $88,350) depending on which hospital the patient visited. Hospitals in areas with the highest cost of living, those in rural areas, and those with more Medicare patients had higher charges, while government-owned hospitals charged less. Overall, our model explained 43% of the variation in adjusted charges. Estimated discounted prices paid by private insurers ranged from $3,421 to $80,903 (median: $28,571). Charges and estimated discounted prices vary widely between hospitals for the average California patient undergoing PCI without major complications, a common and relatively homogeneous episode of care. Though observable hospital characteristics account for some of this variation, the majority remains unexplained.
Effects of Federal Policy to Insure Young Adults: Evidence from the 2010 Affordable Care Act's Dependent-Coverage Mandate
(2013) Akosa Antwi, Yaa; Moriya, Asako S.; Simon, Kosali
Using data from the Survey of Income and Program Participation (SIPP), we study the health insurance and labor market implications of the recent Affordable Care Act (ACA) provision that allows dependents to remain on parental policies until age 26. Our comparison of outcomes for young adults aged 19-25 with those who are older and younger, before and after the law, shows a high take-up of parental coverage, resulting in substantial reductions in uninsurance and other forms of coverage. We also find preliminary evidence of increased labor market flexibility in the form of reduced work hours.
Variation in charges for 10 common blood tests in California hospitals: A cross-sectional analysis
(2014) Hsia, Renee Y; Akosa Antwi, Yaa; Nath, Julia P
Objectives: To determine the variation in charges for 10 common blood tests across California hospitals in 2011, and to analyse the hospital and market-level factors that may explain any observed variation. Design setting and participants: We conducted a cross-sectional analysis of the degree of charge variation between hospitals for 10 common blood tests using charge data reported by all non-federal California hospitals to the California Office of Statewide Health Planning and Development in 2011. Outcome measures: Charges for 10 common blood tests at California hospitals during 2011. Results: We found that charges for blood tests varied significantly between California hospitals. For example, charges for a lipid panel ranged from US$10 to US$10 169, a thousand-fold difference. Although government hospitals and teaching hospitals were found to charge significantly less than their counterparts for many blood tests, few other hospital characteristics and no market-level predictors significantly predicted charges for blood tests. Our models explained, at most, 21% of the variation between hospitals in charges for the blood test in question. Conclusions: These findings demonstrate the seemingly arbitrary nature of the charge setting process, making it difficult for patients to act as true consumers in this era of ‘consumer-directed healthcare.’

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