Mar 1, 2022 - Health

Study: Higher hospital prices don't mean better outcomes

Illustration of a first aid bag filled with cash.
Illustration: Aïda Amer/Axios

Getting care from higher-priced hospitals in an emergency doesn't necessarily result in better outcomes — at least in markets that have little competition, according to new findings from the National Bureau of Economic Research.

Why it matters: Hospital prices vary considerably across regions, and persistent mergers in recent decades have been blamed for driving up the cost of privately insured patients' care.

  • Understanding the relationship between hospital prices, market concentration and quality is important as some policymakers weigh price regulation.

Where it stands: Researchers concluded that in concentrated markets, high prices likely reflect patients' lack of choices in getting care, not hospital quality.

  • More vigorous antitrust enforcement can lead to more efficient outcomes in markets where competition is geographically possible, the researchers write.

Yes, but: There are concerns that heavy handed price regulation could lower the quality of clinical care. What's more, the results may not fully reflect that sicker patients may be admitted more frequently to higher-priced hospitals — and it can be hard to obtain claims data with hospitals' prices.

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