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While the price of healthcare is growing, utilization is dropping and price variations persist, report says

Report analyzed more than 1.8 billion commercial healthcare claims and data visualization to benchmark prices and use across 112 metropolitan areas.

Beth Jones Sanborn, Managing Editor

While certain healthcare services are more common than others, like hip and knee replacements, what patients will pay for care depends on where they get it, and that could mean good things for systems the patients choose, but losses for those they don't.

According to a new Robert Wood Johnson Foundation-funded report from the Health Care Cost Institute, there is wide variation in the commercial prices and utilization of the same healthcare services across U.S. cities and while prices are growing, use isn't. 

The report analyzed more than 1.8 billion commercial healthcare claims and data visualization to benchmark prices and use across 112 metropolitan areas from 2012 to 2016.

Researchers found one constant overarching trend: over time, prices increased and use dropped. From 2012 to 2016, the median metro area saw a 13 percent spike in healthcare while utilization decreased 17 percent.

THE IMPACT

The trend of prices rising adds fuel to the push for transparency in healthcare pricing. As patients shoulder more of their own healthcare costs and providers are faced with the challenge of collecting as much what's owed them, it is even more crucial for patients to be educated and understand what they will pay for care.

The drop in utilization should be a red flag that patients are not only aware they have more options for getting care than the traditional hospital setting, they are exploring those other options, possibly to the detriment of financial margins for hospitals.

THE TREND

Another key finding from researchers is that metropolitan areas with high use tend to have lower prices, and vice-versa. Baltimore had the lowest overall prices in the country and the highest overall use. Additionally, San Francisco and Green Bay, Wisconsin had some of the highest prices but below average utilization mirroring the trend from the opposite angle.

However, not all metro areas followed the trend, as Milwaukee and New York were among the top 10 areas for overall high prices, but also showed high utilization of services.

This report is the second release from the Healthy Marketplace Index series funded by the Robert Wood Johnson Foundation.

ON THE RECORD

"Healthcare costs are critical drivers of national, state and local economies. These new Healthy Marketplace Index tools provide apples-to-apples comparisons of price and use levels for over 100 metro areas across the U.S. – giving local stakeholders more clarity on the unique drivers of healthcare spending in their respective areas," said Niall Brennan, president and CEO of HCCI.

"Our findings underscore the need to dive into the data and understand the local factors explaining healthcare costs, as there is not one overall narrative, but many individual ones from metro to metro," said Bill Johnson, PhD, lead author and senior researcher at HCCI.

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com

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