April 27, 2016

Some States Pay Twice the Price For Health Care, Finds New Report

Large Commercial Claims Dataset Sheds Light on Price Variation for Common Medical Services

Washington, DC – Among the commercially insured, wide variation in prices have some states paying more than double what other states pay for health care, finds a new analysis from the Health Care Cost Institute (HCCI). The study also finds that within states, health care prices can vary threefold. The study, published today as a Web First in Health Affairs, is accompanied by HCCI’s National Chartbook of Health Care Prices—2015, which illuminates differences in prices for over 240 common medical services in 41 states and the District of Columbia.

Compared to the national average, Alaska has the highest average health care prices, followed by Wisconsin, North Dakota, New Hampshire and Minnesota. In New Hampshire and Wisconsin, over 20 percent of health care services are twice the national average price. While in Arizona, Florida, Maryland and Tennessee, over 90 percent of health care services are priced lower than the national average.

Prices vary more for some health care services than others. For example, states have similar prices for acupuncture, while prices for cataract removal vary significantly from state to state. The greatest variation in prices was observed for imaging, radiology and lab tests.

“These data enable policymakers, payers and consumers to see where prices for health care are highest compared to the national average and neighboring states, and begin to explore why these differences exist,” said HCCI Executive Director David Newman. “We hope states use this information to design appropriate solutions to address potentially unnecessary price variation.”

Prices for services also varied widely between cities in the same state. Prices for knee replacements varied most in California, with a $27,243 average price difference between Riverside ($30,261) and Sacramento ($57,504). In Ohio, the average price of a pregnancy ultrasound in Cleveland was almost three times that of Canton ($522 and $183 respectively), even though the two cities are only 60 miles apart.

Variation in prices has a substantial impact on health care spending and patients’ cost sharing. While some price variation can be attributed to differences in wages or rent, the remaining variation is most likely due to differences in underlying market dynamics, such as lack of transparency, market power, or the availability of alternative treatments, say the authors. Reporting on price variation at the service-level can allow us to focus our attention on better understanding the causes.

“We don’t pay for health care, we pay for a physical or an ER visit,” said Eric Barrette, co-author of the study and director of research at HCCI. “By drilling down into the price of individual services, we can better see where prices are higher than average and begin to unpack what is driving those higher prices.”

Nine states were excluded from the report due to lack of sufficient data or because of state statutes that discourage data sharing. The excluded states are Alabama, Hawaii, Idaho, Michigan, Montana, South Dakota, Vermont and Wyoming. Arkansas, which has signaled that it does not want its state data compared to national data, was also excluded.

“Some states data are locked up,” said Newman. “This byzantine behavior stands in the way of efforts to pursue transparency and understand the root causes of rising healthcare spending.”

The reports were developed using HCCI’s large dataset. HCCI holds de-identified Health Insurance Portability and Accountability Act (HIPAA) compliant claims data from three of the nation’s largest health insurance providers. In total, HCCI has claims for 50 million Americans covered by ESI per year. Data for the reports were taken from over 1.8 billion claim lines spanning a two-year period from 2012-2013. All prices reported by HCCI were trended forward to provide more current estimates.

March 2, 2016

Modest Benefit Derived When Consumers Shop For Non-Urgent Care

March 2, 2016 - Contrary to expectations, giving consumers prices so they can shop for health care services may only have a modest effect on reducing health spending

February 25, 2016

HCCI Releases New Independent Research Assessing National and State Health Policies

February 25, 2016 - The Health Care Cost Institute (HCCI) released a set of six policy briefs assessing the impact of a range of national and state policies on health care costs and utilization.

October 29, 2015

New Report: Health Care Spending Grew 3.4 Percent in 2014, With More Dollars Going to Brand Drugs

October 29, 2015 –- Spending on health care for the privately insured in the United States grew at a steady rate over the past five years, increasing 3.4 percent in 2014

September 30, 2015

HCCI Releases New Data to Assess Health Care Markets Across the Country

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

July 8, 2015

Spending for Children’s Health Care Rising Faster Than Total ESI Population, Finds New Report

July 8, 2015, Washington, DC—Spending on health care for children (ages 0–18) covered by employer-sponsored insurance (ESI) grew an annual average of 5.7 percent per year between 2010 and 2013, compared to 3.9 percent for the total population (ages 0–64) with ESI, finds a new report from the Health Care Cost Institute (HCCI).

May 7, 2015

Health Care Spending for Privately Insured Children With Diabetes Rises Sharply Between 2011 and 2013

May 7, 2015 –- Per capita health care spending for children with diabetes covered by employer-sponsored insurance (ESI) grew faster than for any other age group with diabetes, rising 7% from 2011 to 2012 and 9.6% from 2012 to 2013, according to a study released today by the Health Care Cost Institute (HCCI). Overall per capita spending for individuals younger than age 65, covered by ESI, and with diabetes rose 4.1% in 2013, nearly double the 2012 increase (2.2%).

March 5, 2015

HCCI and NASHP Announce State Health Policy Grant Recipients

March 5, 2015 – The Health Care Cost Institute (HCCI) and the National Academy for State Health Policy (NASHP) have announced the recipients of the State Health Policy Grant Program. The program has selected five research projects that will analyze state health reform initiatives and policy trends.

March 5, 2015

Minnesota Health Care Leader Joins HCCI

Minnesota health care executive Scott Leitz has joined the Health Care Cost Institute as its Chief Transformation Officer.

February 25, 2015

Health Care Cost Institute (HCCI) Launches Guroo – To Provide Consumers With Free Access To A Health Care Transparency Tool

February 25, 2015 – The Health Care Cost Institute (HCCI), an independent, non-partisan, non-profit organization, announced today the introduction of, a consumer-focused website that provides national, state and local cost information for common health conditions and services using claims from multiple insurers for more than 40 million insured individuals - numbers that no one else has. The new website is free and accessible to everyone, regardless of whether they have insurance or who their insurer is.

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