The median metropolitan area for the duration of the study period saw a 17 percent drop in utilization of services, but prices rose 13 percent. (Photo: Shutterstock)
Health care prices are rising at three times the rate of inflation, except where they're not. According to the latest version of the Health Care Cost Institute's analysis of commercial claims, there's a lot of variation in health care prices across the country. Metropolitan areas that have higher prices generally have lower use of care, while the opposite also tends to be true.
“That fact that you could be paying 2.5 times more for the same healthcare services in San Jose (Calif.) than in Baltimore (Md.) suggests there is a lot of variation in prices across the country,” Bill Johnson, lead author of the report and senior researcher at HCCI, told Modern Healthcare.
A review of the data by AJMC.com points out some exceptions—for instance, Milwaukee, Wisconsin, and New York City were both high-price areas but also had high utilization of care—the variation, according to the study's authors, appears to stem from “underlying differences in demand for health care services, supply of providers, or a combination of both.”
The report also found that people are apparently using less care overall, with the median metropolitan area for the duration of the study period seeing 17 percent lower utilization of services. For the same period, prices rose 13 percent.
According to Modern Healthcare, most metro prices varied within a range of 25 percent below the national median to 30 percent above it. However, some areas stood out from the crowd for “dramatically higher prices than the national median.” San Jose's prices were 82 percent above, as were prices in Anchorage, Alaska; San Francisco, meanwhile, saw its prices come in at 64 percent above the median.
When it came to usage, that varied too, from 55 percent below the national median in Riverside, California, to 34 percent higher in Baltimore.
Researchers didn't identify a single cause for price variation, but the report pointed out their choice of a number of elements that play a part: market concentration, payer mix, wasteful spending, cost of living, demand for services and practice patterns.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
