More on Budgeting

High healthcare use linked with lower prices, according to Robert Wood Johnson Foundation

The inverse is also true: Low usage is associated with higher prices, although there are outliers across the country.

Jeff Lagasse, Associate Editor

Areas in which healthcare usage is high typically have lower prices, and according to an interactive report from the Robert Wood Johnson Foundation, the inverse is also true: Low usage is linked to higher prices, based on a review of 1.8 billion healthcare claims over a four-year period.

Looking at data from 112 metro areas from 2012 to 2016, the authors compared price and use levels for inpatient, outpatient and professional services categories over that four-year span.

While the link between high usage and lower prices was mostly consistent, there were a few anomalies, mainly New York City and Milwaukee, Wisconsin.


There were areas in virtually all regions of the country showing high prices and high healthcare use, as well as low prices and low utilization, due to a number of factors -- population differences, provider/practice patterns and social determinants of health chief among them. Those factors can drive both cost and ways of using healthcare.

While high prices likely factor into high spending in both areas, examining the drivers of use could give health leaders a better understanding of what leads to differences in spending levels, the authors said.

On a positive note, the numbers point to patients using less healthcare overall. Over the four-year period in question, the median metro area saw 17 percent fewer services. Prices, though, rose 13 percent.

Future studies will explore the local factors that influence healthcare costs. The authors said market factors play a role in driving spending, rendering it difficult to craft policy solutions that will drive down spending.


An October report from the Altarum Center for Value in Health Care found that prices and spending are growing steadily, but at a moderate pace.

The first half of 2018 saw just 1.9 percent growth, due partly to price increases of only 2 percent in the second quarter. The last time quarterly price growth was above 2 percent was in 2012.

Still, growth has been steady, and the country's healthcare spending habits are at a level nearly double that of similar countries. Spending per capita in the U.S. is more than $9,000, compared to just over $5,000 in other Western nations.

Twitter: @JELagasse

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