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Healthcare cost variations between regions attributed to price, usage

Colorado has the highest prices in the six regions studied, while Maryland came in well below the average.

Jeff Lagasse, Associate Editor

Healthcare costs can vary greatly from one state to the next, and a new report from the Network for Regional Healthcare Improvement attributes this largely to usage and pricing, examining five states in total -- Colorado, Utah, Maryland, Oregon and Minnesota -- as well as St. Louis, Missouri.

One of the few areas that was consistent across those regions was pharmacy pricing, likely due to national pricing policies.

IMPACT

Of the six regions placed under the report's microscope, Maryland showed the lowest costs, clocking in at 20 percent below the benchmark; St. Louis was 6 percent below.

On the other end of the spectrum was Colorado, which had the highest costs at 20 percent above the benchmark. Even though the state's utilization went down from 2015 to 2016, it saw 15 percent increases in inpatient prices and 11 percent increases in outpatient prices.

NRHI's prescription for Colorado is to bring costs down to the statewide median, or better yet, bring them down to the multi-state average. That would save the state more than $54 and $141 million annually, respectively, the report found.

THE TREND

Other reports, including a recent one from the Health Care Cost Institute, found areas of the country in which prices were even higher, including San Jose, California, which in 2016 had rates 65 percent above the national average. Similar numbers were posted in Anchorage, Alaska.

Because prices are growing slowly but steadily, spending is doing the same, with healthcare spending in 2018's second quarter at 5 percent more than during the same timeframe in 2017. Year-over-year, the growth rate for the first half of the year was 4.8 percent.

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com

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