The murky world of hospital pricing would be exposed to more sunlight under a bill approved this week by state lawmakers.

The legislation calls for the state-run employee health plan to annually publish details of its spending on hospital care, which is the predominant driver of rising health costs nationwide.

The report is meant to document the prices that individual hospitals charge for various services – basic information that consumers and policymakers need, but which is normally hidden from public view.

The bill – sponsored by Sen. Andrew Gounardes, D-Brooklyn, and Assembly Member Michaelle Solages, D-Valley Stream – was unanimously approved by the Senate on May 30 and passed the Assembly by a vote of 143-2 on Monday.

The legislation was the brainchild of the 32BJ Health Fund, a benefit plan for unionized building service workers which has identified hospital charges as the “leading driver” of rising health costs for its members.

The 32BJ Health Fund has also led the push for a similar reporting on hospital spending by the City of New York.

A 2022 study by the fund, based on its own claims data, found that six of the city’s biggest not-for-profit hospital systems – NewYork-Presbyterian, NYU Langone, Northwell, Mount Sinai, Montefiore and Maimonides – charged significantly more for common procedures than hospitals owned by the city or by major medical centers in Boston.

For example, delivery of a baby by Cesarean section typically cost more than $45,000 at NewYork-Presbyterian, compared to $27,000 at Boston Medical Center and $18,000 at a New York City Health + Hospitals facility.

The Albany legislation would generate a similar analysis of hospital spending by the New York State Health Insurance Plan, or NYSHIP, which covers state and local government employees and retirees and their family members.

With 1.2 million members, NYSHIP reported paying $10.3 billion in claims in 2021, 41 percent of which went toward hospital care.

If the bill is signed by Governor Hochul, the first report on NYSHIP’s hospital spending would be due from the Department of Civil Service on Jan. 1, 2024.

New York’s overall hospital spending is high and rising fast. As of 2020, the state’s per capita hospital costs were 43 percent higher than the national average, up from 22 percent five years earlier.

 

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

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