February 13, 2018, Portland, ME — The considerable differences between the total cost of healthcare in five states is largely driven by local patterns of healthcare usage and pricing. These regional differences are explained in a report released today by the Network for Regional Healthcare Improvement (NRHI), a national non-profit representing regional health improvement collaboratives (RHICs) and state partners working to achieve better, more affordable healthcare.
Healthcare Affordability: Untangling Cost Drivers, is NRHI’s second annual report comparing the total cost of care for those with private insurance in various U.S. regions. The report uses the average cost of healthcare for comparable populations as its benchmark, and compares each state to that average. Like other recent studies, Untangling Cost Drivers finds that healthcare costs vary widely between states. The NRHI report, however, digs into the “why” and reveals how different care delivery patterns and local prices contribute to the significant cost differences between Oregon, Utah, Colorado, Minnesota, and Maryland.
Each state’s numbers tell a story, giving stakeholders insight into the role that local policies, demographics, and market factors play in driving healthcare costs. This knowledge can enable them to take steps to address their specific issues. For example, the report finds that in Colorado, the high use of outpatient services had the greatest impact on its total cost. And while Utah, with the nation’s highest birthrate used inpatient resources significantly more than the average, its lower prices contributed to a below average total cost of care.
Across states, inpatient care saw the greatest variation in price. Hospital prices were 16 percent higher than the benchmark in Oregon and Colorado, compared to 12 and 14 percent below average in Maryland and Utah, respectively. This variability occurred in every category of care except pharmacy pricing, which is largely attributable to the influence of a few, large pharmacy benefit managers and pharmaceutical manufacturers’ national pricing policies.
Healthcare Affordability: Untangling Cost Drivers was developed with support from the Robert Wood Johnson Foundation. The report can be found at http://www.nrhi.org/uploads/benchmark_report_final_web.pdf.