Higher prices from hospitals, doctors and other providers are the biggest driver of rising health costs, according to a recent study analyzing billions of private insurance claims. <\/p>\n
The report from the Health Care Cost Institute is the biggest study to date of privately insured patients. The study examined 3 billion health care claims from 33 million people insured by Aetna, Humana and UnitedHealthcare during 2009 and 2010. <\/p>\n
The study found higher prices in all four major categories of medical spending: inpatient, outpatient, doctor fees, and prescription drugs, with the highest increase in outpatient services. <\/p>\n
Unlike other recent reports on health care spending, we find that the increase is mostly due to unit price increases rather than the changes in the quantity or intensity of services, the report found. <\/p>\n
Insurance premiums are rising because health care spending is rising, according to Northwestern University professor David Dranove, a specialist in health care management, who worked on the report. <\/p>\n
The study showed Americans paying more but using slightly less health care in 2010 than 2009, Dranove said. Outpatient visits and inpatient admissions declined in this period. The study found that part of the price rise was due to sicker patients requiring more complex treatment. Still, the biggest factor was the increase in prices. <\/p>\n
One prominent explanation for the rising prices: the growing power of big hospital systems. <\/p>\n
Providers around the country have consolidated and achieved a great deal of market power that enables them to demand higher prices from insurers, Dranove said. <\/p>\n
That was one of the findings of a recent series in The News & Observer and The Charlotte Observer. Prognosis: Profits found that North Carolinas big urban hospitals raised prices, posted strong profits and built up big reserves during the recession. Top executives enjoyed million-dollar compensation packages as they expanded, bought expensive technology and built lavish facilities. Hospitals also enjoy a perk worth millions each year: They pay no income, property or sales taxes. <\/p>\n
The series found that hospitals raise their charges each year: Duke Hospital by 6 percent each year, UNC Hospitals by 5 percent. The hospitals are seldom paid the full charges because insurance companies negotiate discounts. <\/p>\n<\/p>\n
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