Healthcare Pricing Trends Suggest Marketplace Complexity

Is your healthcare marketplace “healthy?” A recent economic metrics analysis tool developed by the Health Care Cost Institute (HCCI) seeks to answer that question. The Healthy Marketplace Index Report (HMI), funded by the Robert Wood Johnson Foundation, is a metrics analysis tool that measures the performance of healthcare marketplaces based on geographic location, according to a recent press release.

A data brief released by HCCI regarding the marketplace metrics states that findings were more complex than researchers had anticipated. HCCI notes nuances such as inpatient versus outpatient care and primary care versus specialists, indicating that “there may actually be different markets for different types of services.”

The HCCI also drew three general conclusions from the HMI’s data. First, HCCI concluded that healthcare prices and healthcare use are not tied together. This may be counterintuitive, HCCI states, seeing as researchers could assume that high healthcare costs may produce low utilization. However, some regions -- Denver,Colorado, Greensboro North Carolina, Palm Bay, Florida --  reported high costs as well as high use.

The second main finding was that price patterns were not always consistent. In fact, the HMI found that in Jacksonville, FL., inpatient and outpatient prices diverged, while in Miami, Fl., inpatient and outpatient prices were consistent.

Last, HCCI found a correlation between inpatient services and premature deaths, stating that in regions where there was a higher utilization of inpatient services, there was a lower instance of premature death. HCCI noted that inpatient services’ direct effect on mortality was not explicitly studied.

Additionally, HCCI found that it may be impossible to create a definitive ranking of healthcare markets because of those nuances. This is because prices and utilization varied amongst services, and HCCI found no correlation between prices and utilization of services.

The HMI also illuminated some interesting findings regarding healthcare marketplaces, not only amongst different states, but also amongst different regions within one state. For example, HCCI found that inpatient service prices are 43 percent higher in Fort Collins, CO, than in the Colorado Springs area.

The HMI presents data regarding healthcare prices, productivity, and utilization between 2011 and 2013. By providing health insurers with this information, HCCI hopes it can make necessary policy changes to improve the healthcare system.

“We hope that this information will help researchers, employers, health plans, and providers better understand the markets they operate in and develop meaningful policies that improve the value of health care services,” says HCCI’s Director of Research, Eric Barrette.

Officials from the Robert Wood Johnson Foundation also hope that this tool can inspire analysis that will help improve healthcare spending.

“The Health Marketplace Index succinctly characterizes some of the most important attributes of health care marketplaces that influence not only health outcomes, but also public and private spending on health care,” says Katherine Hempstead, Director of Health Insurance Coverage at the Robert Wood Johnson Foundation.

As the health insurance market continues to evolve, tools like the HMI could be potentially critical in creating policy changes to enhance healthcare coverage for all beneficiaries.