Track: Healthcare Operations and Services

Abstract

Health Plan Price Transparency rules that became effective January 1, 2022 require most group health plan insurers to disclose reimbursement rates negotiated between insurers and providers. Using a small subset of this massive new data source, we characterize patterns of variation in rates negotiated between a large health insurance company and healthcare providers for office visits in Florida. Rates vary with location, specialty, and practice size and, importantly, with complex interactions among these factors. Rates are higher for larger providers, consistent with larger providers having more market power. Patterns of differences in rates across plans offered by the insurer with respect to moderating factors such as per capita income differ between larger and smaller providers, consistent with larger providers using their market power to engage in various forms of price discrimination. Considerable variation in rates remains after accounting for these factors in a highly parameterized model, some of which may be due to uncontrolled variation in provider quality. Our exploratory findings demonstrate the potential for this massive new dataset to facilitate a deeper understanding of the workings of healthcare markets, improving the knowledge base for policies aimed at controlling costs or improving quality or access.