1974-P: Price Variation of U.S. Diabetes Mellitus Hospitalizations: An Examination of Market Structure and State Policy Drivers

Introduction and Objective: Diabetes Mellitus (DM) has been identified as a key driver of U.S. healthcare costs. Since 2021, US hospitals have been required to share information on their previously confidential contractual prices with payors. The Objective of this study was to examine the share of U.S. DM hospitalization price variation that is explained by market structure and policy differences across U.S. states. Methods: This study used 2025 data on national short term acute care hospital and payor facility prices for hospitalizations due to DM, DM with complication or comorbidity (CC), and DM with major complication or comorbidity (MCC). Descriptive and multilevel mixed-effects regression analyses were used to characterize and decompose price variation. Results: Our analytic samples span 50 U.S. states; 418 health systems, 2291 hospitals and 230 payors. The interquartile dollar price difference (75th-25th percentile) was $4,171.5 for DM, $5,884.7 for DM CC, and $10,289.9 for DM MCC hospitalizations. Keeping policy environments, MS-DRG, contracting methodology and payer market fixed, 6.9% of DM hospitalization price variation was explained by across state differences; 25.4% by across health system differences; 4.4% by across hospital variation and 27.2% by across payor differences. Additionally, we found that states with CON laws restricting competition within hospital markets had 8.3% higher price, and that prices were 8.8% higher within Medicaid expansion states. Conclusion: DM hospitalization prices vary considerably across U.S. markets. In seeking to reduce healthcare costs related to DM hospitalizations, policy makers may wish to consider examining the role of anti-competitive CON regulations; as well as the pricing effects of Medicaid expansion policies. Disclosure S. Linde: None. L.E. Egede: None. R.J. Walker: None. J.A. Campbell: None. Funding Effort for this study was partially supported by National Institute on Minority Health and Health Disparities (R01MD018012, PI: Egede/Linde; and R01MD017574, PI: Egede/Linde; R01MD013826, PI: Egede/Walker), and National Institute of Diabetes and Digestive Kidney Disease (R01DK118038, R01DK120861, PI: Egede).