AHA explains limits of hospital price cap simulator for states in Health Affairs essay

An AHA-authored essay published by Health Affairs today analyzes why a hospital price cap simulator tool, created by Brown University’s Center for Advancing Health Policy through Research, has limited use. The tool is designed to estimate potential savings if states impose caps on commercial hospital rates for their employee health plans. The AHA’s John Allison, senior associate director of health policy and analytics, Molly Smith, group vice president of public policy analysis and development, and Aaron Wesolowski, vice president of research strategy and policy communications, shared various concerns about the tool’s applicability and that its use would likely lead to broad, unreliable estimates lacking substantive context. They said state policy makers should exercise caution when using the simulator for estimates, as it fails to account for nuances and variation in existing state policies, including a misrepresentation of Oregon’s hospital payment cap. They added that the use of RAND Hospital Price Transparency Study data likely underrepresents state employee health plan data.

“Taken together, these and other concerns cast meaningful doubt on the tool’s broader applicability and suggest that further research is warranted to explore how these variations might fit — or fail to fit — within the framework proposed by the simulator’s authors,” the AHA authors wrote.