Ep. 29: The Social Science of Hospital Pricing with Dr. Morgane Mouslim & Dr. Morgan Henderson of the Hilltop Institute

Amy Barnes27min

Dr. Ian Anson00:01

Hello and welcome to Retrieving the Social Sciences, a production of the Center for Social Science Scholarship. I'm your host, Ian Anson, Associate Professor of Political Science here at UMBC. On today's show, as always, we'll be hearing from UMBC faculty, students, visiting speakers, and community partners about the social science research they've been performing in recent times. Qualitative, quantitative, applied, empirical, normative. On Retrieving the Social Sciences we bring the best of UMBCs social science community to you.

Dr. Ian Anson00:35

Some impressive institutions call Maryland home. Not only do we have UMBC, of course, worldwide leader in the social sciences and inclusive excellence and 16 over one NCAA tournament upsets. We also have a whole host of fantastic hospitals that provide research and cutting edge medical care. Of course, we have Johns Hopkins Hospital, the University of Maryland Hospital System, the Kennedy Krieger Institute, and the list goes on. But you know, when we find ourselves in need of services at these top notch facilities, one question likely stands out in all of our minds. Just how much are we going to end up paying for that care that we receive?

Dr. Ian Anson01:27

As it turns out, the answer to this question is not simple. Answering it is an important social science prerogative though, and researchers at UMBC are working on it right now. I recently had the opportunity to talk with Dr. Morgan Henderson and Dr. Morgane Mouslim about their work on the subject of hospital pricing. Both of these social scientists work at the Hilltop Institute, a nonpartisan research organization at UMBC that is dedicated to improving the well being of people and communities. Dr. Henderson is a principal data scientist at the Hilltop Institute, and an affiliate Assistant Professor in the UMBC Department of Economics, while Dr. Mouslim is a policy analyst at the Hilltop Institute. Let's listen in to our recent conversation to learn more about the Institute, its work in the field of healthcare, and the fascinating social science of the cost of hospital services.

Dr. Ian Anson02:20

All right, I'm delighted today to have Dr. Morgane Mouslim and Dr. Morgan Henderson in the studio to discuss some of their fantastic research through the Hilltop Institute. Thanks so much to both of you for being here. (MM: Thanks for having us. MH: Thanks very much, Dr. Anson). Great. So I want to jump right in to think a little bit about some of the research that you've recently been working on. This research has recently dealt with the issue of pricing for healthcare services at hospitals. And you know, I know, I'm not the only one who maybe has had some experience with these prices. You know I think back obviously, to the delivery of my daughter, which resulted in a very large bill that, you know, we had to pay. But you know, I don't think a lot of people have thought very much about the social science of these prices, you know, where they actually come from. So I wanted to just ask you, first of all, what in your experience are some of the biggest determinants of hospital pricing?

Dr. Morgan Henderson03:09

So you've started with like, the million dollar question here. It's a really good question. And like you mentioned, your daughter's birth, this is a subject that people really connect with, because if you've had the occasion to have been in the hospital, or have a loved one be in the hospital, and then you start getting the bills, plural often, it can really be like, Wow, where Where are these coming from? What on earth is driving these prices? And so the short answer is that there is no short answer to what are the biggest determinants of hospital pricing. So as a bit of a landscape, up until very recently, the only data that was really available to study anything related to what the actual prices are that are being paid to hospitals was claims. And theese are basically receipts. These are administrative datasets that were not intended to be used in research. These are, these are big datasets that are kept by insurance companies, essentially, to record kind of the money that insurance companies are sending to providers. And so it has been really difficult up until recently to study the prices that are being paid to hospitals for services because of this data limitation. This was the only data source in town and it was not particularly well suited to study this question. And we can add to that the fact that hospital pricing is really, really complicated. Hospitals provide tnes of thousands of services ranging from room and board in the ICU to that little aspirin pill and everything in between. So tens of thousands. Hospitals can contract with dozens, if not hundreds of separate plans. And there can be a separate contracting structure for every single thing. To find, meaning, there can be a separate price point for every, for that aspirin pill, there could potentially be 200 different price. One for every different insurance company that the hospital contracts with. And so wrapping our heads around this as social scientists is a wonderful challenge, but it is a huge challenge. And the research so far has shown that the factor that seems to matter, and I won't say matter most because we don't really know what matter matters most. But the fact that it seems to matter is market power. Because the way that these prices are set, it's, it's like a two party negotiation between hospital and insurance company. And if a hospital has marketing, has market power, for example, if they're the only hospital in town, or if they have a super good reputation, they can kind of charge higher prices. Whereas if the insurer has the market power, like if they're very, very big, big, powerful insurer, they can set lower prices. And so that that market power difference, that's what a lot of researchers think is is one of the big factors.

Dr. Ian Anson06:06

Wow. So Dr. Henderson, what I'm taking away from your really interesting discussion is that this is not quite like going to the restaurant to order a hamburger, right? Because it's not just you know, there's not one menu, right that everybody sees, right? There's, these are tailored essentially, to the kinds of insurance that people have, and a variety of other factors, and so this is a far more complicated scenario might otherwise be.

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