Commercial inpatient hospital price growth driven by system affiliation and nonprofit-status hospitals

As policymakers continue to grapple with rising health care costs and prices, understanding trends and variations in inpatient prices among hospital characteristics is an important benchmark to allow policymakers to craft targeted policies. In this study, we provide descriptive trends on variation in inpatient prices paid by commercial health plans stratified by hospital characteristics using data from Health Care Cost Institute's employer-sponsored insured claims data. Our analyses found evidence of considerable variation among inpatient price levels and growth among system affiliation and profitability. Prices among system-affiliated hospitals grew from $14 281.74 in 2012 to $20 731.95 in 2021, corresponding to a 45.2% increase during this period. On the other hand, prices among independent hospitals grew more slowly, from $13 460.50 in 2012 to $18 196.90 in 2021, corresponding to a 35.2% increase. We did not observe a similar trend in growth rates among case mix index by hospital characteristics, implying that differential inpatient price growth is not driven by changes in case mix by hospital characteristics. Heterogeneity in hospital prices and price growth by type of hospital suggests that public and private policymakers aiming to rein in health spending should consider policies that address this variation.