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- Creators: School of International Letters and Cultures
- Creators: Department of Supply Chain Management
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Data Sources: I use the Healthcare Cost and Utilization Project’s Nationwide Inpatient Sample (NIS) from 2000 to 2011. The NIS is a 20% sample of all inpatient claims. The Manhattan Institute supplied data on the availability of health savings accounts in each state. State PTR implementation dates were gathered by Hans Christensen, Eric Floyd, and Mark Maffett of University of Chicago’s Booth School of Business by contacting the health department, hospital association, or website controller in each state.
Study Design: The NIS data was collapsed by procedure, hospital, and year providing averages for the dependent variable, Cost, and a host of covariates. Cost is a product of Total Charges within the NIS and the hospital’s Cost to Charge ratio. A new binary variable, PTR, was defined as ‘0’ if the year was strictly less than the disclosure website’s implementation date, ‘1’ for afterwards, and missing for the year of implementation. Then, using multivariate OLS regression with fixed effect modeling, the change in cost from before to after the year of implementation is estimated.
Principal Findings: The analysis estimates the effect of PTR to decrease the average cost per procedure by 7%. Specifications identify within state, within hospital, and within procedure variation, and reports that 78% of the cost decrease is due to within-hospital, within-procedure price discounts. An additional model includes the interaction of PTR with the prevalence of health savings accounts (hereafter, HSAs) and procedure electivity. The results show that PTR lowers costs by an additional 3 percent with each additional 10 percentage point increase in the availability of HSAs. In contrast, the cost reductions from PTR were much smaller for procedures more frequently coded as elective.
Conclusions: The study concludes price transparency regulations can lead to a decrease in a procedure’s costs on average, primarily through price discounts and slightly through lower cost procedures, but not due to patients moving to cheaper hospitals. This implies that hospitals are taking initiative and lowering prices as the competition’s prices become publically available suggesting that hospitals – not patients – are the biggest users of price transparency websites. Hospitals are also finding some ways to provide cheaper alternatives to more expensive procedures. State regulators should evaluate if a better metric other than charge prices, such as expected out-of-pocket payments, would evoke greater patient participation. Furthermore, states with higher prevalence of HSAs experience greater effects of PTR as expected since patients with HSAs have greater incentives to lower their costs. Patients should expect a shift towards plans that offer these types of savings accounts since they’ve shown to have a reduction of health costs on average per procedure in states with higher prevalence of HSAs.
Due to the COVID-19 pandemic, pre-health individuals around the world encountered a range of challenges. Research and internship opportunities were cancelled, clinical experience was unreachable, and prerequisites became more demanding in a remote setting. I myself was working in a research lab in Switzerland when the pandemic was declared, resulting in my career-altering internship to be cut short six months. My life-long friend, Alejandra, had the same experience and reached out to me with an extraordinary idea to unite and empower pre-health individuals on a national level. With my skills in event planning combined with her vision, we built the National Pre-Health Conference (NPHC): a 3-day virtual event for pre-health individuals to explore medical careers and learn how to pursue their professional goals, particularly during these uncertain times. We held our inaugural conference with the theme A Future in Medicine in 2020 with over 1000 attendees from around the country. In 2021, we held our second-annual conference with the theme Unity in Healthcare with over 1000 attendees as well. In addition to planning the second-annual NPHC, I employed pre-event and post-event surveys to assess the confidence level of attendees before and after the conference in healthcare experience, research experience, standardized testing, community service, academics, essay writing, and completing graduate/professionals school applications. We found that NPHC improved the confidence level of attendees in all categories. Overall, understanding how NPHC benefits pre-health students will help our team improve for future conferences.