Inpatient Hospital Prices Drive Spending Variation for Episodes of Care for Privately Insured Patients

This issue brief finds that when episodes of care involving hospitalizations, similar to Model 2 of the ongoing Centers for Medicare & Medicaid Services Bundled Payment for Care Improvement demonstration, are applied to privately insured patients, inpatient prices drive the bulk of episode-spending variation. Hospitals with high spending for one service line tend to have high spending for other service lines. The study used 2011 claims data for 590,000 active and retired nonelderly autoworkers and dependents.