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Perspectives on health policy affecting America’s hospitals and the patients we serve.

Latest Altarum Institute Report Outlines “Remarkable” Hospital Prices Data

February 13, 2015 | FAH Hospital Policy Blog Team

Category: Realignment

The Altarum Institute yesterday released its monthly Health Sector Economic Indicators Price Brief for February, which offers a year-on-year assessment of health care economics in 2013 and 2014.  In particular, this report provides definitive proof of continuing slowed hospital care price growth and is a critical indicator of the reality of hospital realignment. The headline of the Altarum Institute’s report notes that the growth rate of hospital prices is historically low:

 “The big news for the month is the minimal hospital price growth—at 0.9%, the lowest rate since September 1998.”

The report also highlights the lowest price growth in Altarum’s records: “Hospital prices for Medicare and Medicaid patients changed by -0.7% and 0.4%, respectively, down 1.4% from November for Medicare and up 0.5% for Medicaid. For other patients, price growth held steady in December at 2.0%. These three most recent readings…are the lowest since this series began in January 2002.” The report concludes that the enduring trends of slowed—or in some cases negative—hospital price growth refutes long-standing misconceptions on hospital realignment, saying:

“This is remarkable, and for the time being, it should quiet those predicting higher prices emanating from hospital consolidation.”

This marks the second consecutive month Altarum has made this exact declaration to those who cling to the longstanding misconceptions of hospital realignment in the 21st century.  In fact, Altarum has been a strong voice in commenting on the new reality of mergers and other transactions among health systems.  In its December 2014 report, Altarum concludes:

“There is no evidence that provider consolidation is boosting hospital price growth.”

Since the Fall of 2014, we have witnessed a shifting tide among experts and health care professionals on the reality of contemporary hospital realignment.  Decades-old data from the 1990s, used frequently by realignment critics, have been challenged by more current analyses that show, as one report states, “no consistent statistical relationship between hospital realignment and price increases.”