AHIP: Hospital prices drive up healthcare costs

Insurers have been saying it for a long time--the prices that hospitals and other providers charge play a large role in the ever-increasing rise in healthcare costs. And now a new study from America's Health Insurance Plans confirms that claim, finding that hospital prices have been growing amid increased provider consolidation.  

Inpatient hospital prices increased more than 8 percent each year from 2008 to 2010, according to the study, published in the American Journal of Managed Care. AHIP alleges a primary driver of these escalated costs is the increase in hospital consolidation, providing hospitals with an unbalance of power to resist insurers' attempts to negotiate lower payments.

"The price of healthcare services is the major driver of overall healthcare cost growth," AHIP CEO Karen Ignagni said Monday in a statement. "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."

What's more, costs rose even higher than average in some states, including New York, Texas, Tennessee and Pennsylvania. In New York, where hospitals' prices increased the most, insurers saw medical costs rise more than 20 percent from 2008 to 2010.

And certain medical procedures grew by more than average, including spinal fusion's increase of 15.2 percent in costs per year between 2008 and 2010. Prices for bronchitis and asthma treatment rose 10.3 percent per year, and uterine laparoscopic procedure for non-malignancy increased by 9.8 percent per year.

To learn more:
- here's the study
- read the AHIP statement

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