Hospital Quality Reports Used As Cost Cutting Tool

By Katie Wike, contributing writer

The CMS website for hospital quality reporting is being leveraged by insurers to reduce costs.

A study in Health Affairs takes a closer look at the CMS hospital quality website and the initiative’s impact on hospital prices which, researchers point out, could be significant. Why? Because private insurers can use this quality information when negotiating prices with hospitals which in turn could lead to lower costs.

According to iHealth Beat, the study “used prices in states with and without public cardiac reporting data and compared the data before and after 2007, when Medicare started publishing performance data on heart attack and heart failure patients' mortality,” on the quality reporting website.

Results showed states that did not have public measures of cardiac quality saw a 3.9 percent annual increase for coronary artery bypass grafts. States with published quality data experienced a 10.6 percent annual price growth.

Also, states without public measures of cardiac quality saw a 4.4 percent annual increase for percutaneous coronary interventions, while there was an 8.7 percent annual inflation in states with published quality data.

“The good news is that getting information to consumers – in this case it's really purchasers who make decisions on behalf of individuals – providing that information helps mitigate hospital price inflation,” said economist Avi Dor of George Washington University in an article for Modern Healthcare. "It's really valuable to provide information."

He also says that this information provides “leverage” in negotiations over prices and increase competition among hospitals.