Provider Prices Drive Cost Hikes

The first report issued by the Health Care Cost Institute made headlines last month not only for what it says but for how it came to say it.

“Health Care Cost and Utilization Report: 2010” crunches 3 billion claims for more than 33 million members of three of the biggest health plans: Aetna, Humana, and UnitedHealthcare. This is to be the first of many reports, and Kaiser Permanente will soon contribute to the data pool. Other insurers are welcome also. “These insurers have agreed, for the first time, to share their data with HCCI ….”

The report represents about 20 percent of all individuals with employer-sponsored health insurance. It does not rely on Medicare claim data that must be extrapolated to the larger population, as is historically the case with such studies.

“Few researchers have access to private claims data, and then generally from one commercial insurer,” the report states.

Some interesting findings off the bat: Utilization has indeed gone down, declining by over 5 percent from 2009 to 2010. Meanwhile, per capita spending increased by 3.3 percent in 2010.Why? Because of the prices that doctors and hospitals charge. It cost 6.4 percent more in 2010 than in 2009 for an inpatient surgical admission, and an ER visit was up 11 percent. Average facility price paid for outpatient surgery rose 8.9 percent.

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