Description and Source of Relative Commercial Price Data Among Massachusetts Hospitals

For decades, Massachusetts has had among the highest per capita healthcare spending and healthcare prices in the nation. This is an issue that has continuously vexed policymakers and has made the cost of healthcare very expensive in the Commonwealth. While efforts were made to tame the rate of growth of healthcare costs and prices, such as the creation of the state’s Health Policy Commission in 2012 and a soft ceiling for healthcare spending, prices continue to increase, albeit at a slower pace.

Data shows that the hospitals in Massachusetts with the highest commercial net patient revenue continue to charge the highest commercial healthcare prices relative to their smaller competitors. The interactive website shows this behavior through the measurement of “relative price” for individual hospitals in Massachusetts.

  • “Net patient commercial revenue” is the revenue paid to hospitals by health insurance companies and large employers. This metric does not include government payers.
  • “Relative price” is an aggregate measure used to compare hospital price variation in Massachusetts. It facilitates the comparison of prices among hospitals while accounting for differences in patient acuity, types of services providers delivered to patients, and different insurance product types that payers offer to their members. This data is reported by the state’s Center for Health Information and Analysis (CHIA) and is collected annually from commercial payers and includes information on private commercial insurance and commercially managed public insurance products such as Medicare Advantage and Medicaid Managed Care Organizations / Accountable Care Partnership Plans.

The average of all hospitals’ prices will have a relative price of 1.0. If, for example, the relative price of a particular hospital is 1.5, that means that that hospital’s prices are 50 percent higher than the overall average of all hospital prices in Massachusetts. Similarly, if the relative price of a particular hospital is 0.84, this means the average price for that given hospital is 16 percent less than average hospital prices in Massachusetts.

This website highlights the analysis of relative commercial price data in Massachusetts. It includes a table showing a multiyear ranking of relative price status for the top 15 hospitals in Massachusetts for the years from 2013-2021 and a subsection for the top 15 hospitals based on commercial revenue. The website includes both a graphical and chart format, highlighting trend data and providing the information in a chart format to outline the relative price for every unique institution.

The website also shows all the hospital systems in Massachusetts and the relative price of the individual hospitals within each system. For 2021, the Mass General Brigham (MGB) system has the most hospitals (four) among the top 15 based on commercial revenue. The hospital system table shows the relative prices for these four MGB hospitals:  Brigham and Women’s, Mass General Hospital, Newton-Wellesley, and North Shore Medical Center. Beth Israel Lahey Health system has two hospitals in the top 15: Beth Israel Deaconess Medical Center and Lahey Hospital and Medical Center. No other hospital system has more than one hospital in the top 15 hospitals.

In the latest 2021 data, Boston Children’s Hospital has the highest relative price of 2.04, and it ranks the highest from 2017 onwards, with its 2017 relative price being 1.78. Before 2017, Massachusetts General Hospital ranked the highest. Generally, the top five institutions in Massachusetts with the highest relative commercial prices are Boston Children’s, Dana-Farber, Brigham and Women’s, and Massachusetts General Hospital, with unique one-off appearances from Cape Cod Medical Hospital.

The lowest relative prices average in the 0.87 range throughout the years, indicating a 13 percent valuation lower than the average. The hospitals that typically fall into this category include the Southcoast Hospitals Group consisting of Charlton, St. Luke’s and Tobey hospitals.

The interactive website shows that a hospital’s position regarding relative commercial price does not change very much over time. Lower price providers remain below average over the course of the years, and high-price providers retain their pricing supremacy over time.