Hospitals tied to regional price variations
Contrasts in health status and hospital prices account for much of the dramatic cost differences in healthcare among regions of the United States, according to a study by the Center for Studying Health System Change and the National Institute for Health Care Reform.
The study focused on the 2009 healthcare spending patterns of 218,000 active and retired autoworkers and their dependents, most with uniform levels of healthcare coverage. The highest level of spending was $9,000 per person in Lake County, Ill., which is part of the Chicago metropolitan area. That's double the rate of spending in Buffalo, N.Y., which totaled $4,500 a year.
The study determined that two-thirds of spending variations may be attributed to differences in the quantity of services provided, with the remainder attributable to price differentials.
Hospital prices were the greatest driver in price differential. The cost for inpatient care averaged 55 percent higher than what Medicare pays, with some regions as low as 30 percent higher than Medicare and some as much as 250 percent higher. Emergency room care had variations ranging from 50 percent higher than Medicare to 300 percent higher.
"The study documents that differences in prices-especially for hospital care-play a significant role in regional spending variation for privately insured people," study author Chapin White, a senior research with the Center for Studying Health System Change, said in a statement.
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