Healthy Marketplace Index Measures Health Care Prices, Productivity, and Competition from 2011-2013; Allows for Local and National Comparisons to Assess Market “Health”

September 30, 2015–The Healthy Marketplace Index Report (HMI), released today, shows the economic performance of more than 40 health care markets across the country. Developed by the Health Care Cost Institute with support from the Robert Wood Johnson Foundation, the HMI is one of the most comprehensive sets of local-level measures of health care financing and delivery available for the privately insured population. Using the HMI, communities can better assess the factors that influence both the affordability and value of health care and see how their health care markets compare to other markets.

In an accompanying data brief and interactive mapping tool, HCCI highlights geographic variations illuminated by the HMI, comparing health care prices and utilization across markets.

HCCI’s analysis also found stark differences between markets within the same state. For example, in Colorado, price levels (prices) for inpatient care in the Fort Collins area are, on average, 43 percent higher than prices in the Colorado Springs market. However, HCCI also identified states where markets were more aligned with one another. For example, in Georgia, inpatient and outpatient prices in the Atlanta metropolitan area are similar to those in the Augusta area.

“No single measure can predict the health of a local market. However, the Healthy Marketplace Index gives us a much clearer picture of how health care systems are performing,” says Eric Barrette, Director of Research at HCCI. “We hope that this information will help researchers, employers, health plans, and providers better understand the markets they operate in and develop meaningful policies that improve the value of health care services.”

Additional findings from HCCI’s analysis of the HMI data include:

  • Prices are not tied to health care use: You might expect that higher prices would be a barrier to use, but some markets have both high prices and high use. For example, Denver, Colorado; Greensboro, North Carolina; and Palm Bay, Florida; all rank high on both price and use for inpatient care.
  • Price patterns are not consistent: You might expect that if prices for inpatient care are higher than average, prices for outpatient care would also be higher. The HMI shows that this is not always the case: in some markets, prices actually diverge. In Jacksonville, Florida; for instance, outpatient prices are low while inpatient prices are high. Conversely, in Miami the opposite is true.
  • Association between inpatient services and health: In markets with higher utilization of inpatient services there tended to be lower rates of premature death. Whether inpatient services directly reduce mortality was not explicitly studied, however.

“The Healthy Marketplace Index succinctly characterizes some of the most important attributes of health care marketplaces that influence not only health outcomes, but also public and private spending on health care,” says Katherine Hempstead, Director of Health Insurance Coverage at the Robert Wood Johnson Foundation. “We hope the information is valuable to local stakeholders, such as consumers, employers, and policymakers, who are trying to improve the health care delivered in their communities.”

The HMI includes metrics related to three aspects of the economic environment of health care markets: price, productivity, and competition. The price indices use a common “basket” of health care services for inpatient care and outpatient care. The productivity index components include measure of population health and health care services use. Measures of hospital concentration, related to the competition aspects of markets, are also include in the HMI. Healthcare markets are defined by Core Based Statistical Areas for these analyses. The HMI covers the period from 2011 through 2013.

The 2015 Healthy Marketplace Index Report, accompanying data brief, and mapping tool will be available on the Health Care Cost Institute’s website on September 30, 2015 at 12:01 am ET at www.healthcostinstitute.org/hmi

During the design and construction of the HMI, HCCI received technical expertise and counsel from an advisory board, whose members included:

  • Cory S. Capps, PhD, Partner, Bates White Economic Consulting;
  • Donald F. Cox, PhD, Senior Economist, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services;
  • Mary Jo Condon, MPPA, Senior Director, Midwest Health Initiative; and
  • Raymond Scheppach PhD, Senior Lecturer at the Batten School of Leadership and Public Policy, Economic Fellow at the Miller Center for Public Affairs, University of Virginia

Other individuals consulted during the project were:

  • Stephen T Parente, PhD, Associate Dean, Professor of Finance and Director, Medical Industry Leadership Institute at the Carlson School of Management, University of Minnesota;
  • Bianca Frogner, PhD, Associate Professor, Family Medicine, University of Washington;
  • Amanda Starc, PhD, Assistant Professor of Health Care Management, The Wharton School, University of Pennsylvania; and
  • Christopher Ody, PhD, Research Assistant Professor of Strategy, Kellogg School of Management, Northwestern University

The HMI results and report do not necessarily represent the views of the RWJF, the HMI advisory board, external experts, or their organizations.

The dataset for the HMI includes HCCI’s administrative claims data for over 40 million Americans per year with employer-sponsored insurance from 2011 to 2013, which accounts for more than 25 percent of the nation’s privately insured population. Additional data sources include 2013 and 2015 County Health Rankings and Roadmaps data, and the AHA Annual Survey Database for the years 2012 and 2013.

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