The Center for Studying Health System Change in conjunction with the National Institute for Health Care Reform released its latest report examining the variation in private health care spending. Here are some important excerpts:
“Differences in health status explain much of the regional variation in spending for privately insured people, but differences in provider prices—especially for hospital care—also play a key role, according to a study by the Center for Studying Health System Change(HSC) based on claims data for active and retired nonelderly autoworkers and dependents.”
“…health spending per enrollee in 2009 varied widely across 19 communities with large concentrations of autoworkers, from a low of $4,500 in Buffalo, N.Y., to a high of $9,000 in Lake County, Ill.”
“…wide differences across communities in the prices paid to health care providers also explain a large share of regional spending variation. For physician office visits, prices paid by the autoworker plan are similar to Medicare prices and vary little across communities. For hospital services, the prices paid by the autoworker plan far exceed Medicare prices and vary widely across communities. The study findings suggest that opportunities to control spending growth lie in restraining hospital prices and improving people’s health status, which will require purchasers to develop new strategies.”
“The large variation in spending per enrollee raises two questions: why are some areas more costly than others, and does the pattern of variation suggest strategies for controlling spending growth?”
“Hospital inpatient care. The prices for inpatient hospital care paid by the autoworker plan are, on average, 55 percent higher than what Medicare would pay, and the price gap varies widely across communities. In the lowest-price communities—Syracuse and St. Louis—the autoworker prices are 30 percent above Medicare. In the highest-price community—Lake County—the autoworker price is more than two-and-half times the Medicare price.”
“Hospital emergency department care. The prices paid by the autoworker plan for hospital emergency department care are, on average, more than double the Medicare price, and the price gap varies even more widely across communities than for inpatient care. In the lowest-price communities, the autoworker plan pays prices about 50 percent higher than Medicare, while in the highest-price community—Indianapolis—the autoworker plan pays prices three times as high as Medicare.”
