Price vs. Use

Health Care Cost Institute Healthy Marketplace Index

Price

Use

Price & Use

Hospital Concentration

Price
Use
Price & Use
Hospital Concentration
 
 
Health Care Cost Institute Robert Wood Johnson Foundation

Healthy Marketplace Index

Health care spending in the United States is on the rise and accounts for nearly 18% of US economic activity. While policymakers continue to explore the contributors to this phenomenon at the national level, differing local trends add complexity - but critical detail - to the picture of how health care dollars are spent across the country.

We analyzed more than 1.8 billion health care claims for people with commercial insurance from 2012 to 2016. We computed measures of health care service prices and use, and other measures such as provider market structure for 112 local areas in 43 states. We found that not only did spending trends and drivers vary substantially across metro areas, they varied within metro areas when we segmented the data into categories of services like inpatient, outpatient, and physician services. In short, each metro had a different experience.

This report explores these varying trends in order to better understand their sources. Use our interactive maps and charts to investigate and compare drivers of health care spending.

How does your area stack up?

Price

Use

Price & Use

Hospital Concentration

Health Care Cost Institute

 

 

 

 

 

HCCUR Tool

HMI Price Index Tool

Healthy Marketplace Index
 
Health Care Cost Institute Robert Wood Johnson Foundation

Healthy Marketplace Index Volume I: Price Index

Health care prices have grown rapidly across the United States. But focusing on the national picture doesn’t capture how these rising prices have affected local areas differently. Over the last five years, price levels and growth rates varied widely for different types of health care services both across and within metro areas. In short, each locality had a different experience.

This report explores these differences.

Analyzing over 1.78 billion commercial claims, we compared the average prices paid for the same set of health care services in 112 metro areas across the country. This report presents the price level benchmarks for the U.S. health care system from 2012 to 2016 using a variety of interactive maps and charts to help consumers and stakeholders understand how the prices in their local area compare to others around the country.

How does your area stack up?

Find Out!

Health Care Cost Institute

 

 

 

 

 

Overall Health Care Prices in U.S. Metros Relative to National Average, 2016

Find a Metro:

PERCENT OF NATIONAL AVERAGE

-50%
 
50%

 

the national average in 2016

Similar prices to ___ and ___

Metros Ranked by Price

 

___

___

2

Health Care Prices Varied Widely by Metro

Health care prices across the country were heavily skewed. Several major outliers were well above the national average, inflating the average dramatically: San Jose, CA (65% above the national average), Anchorage, AK (65%), and San Francisco, CA (49%). As a result, 86 of the 112 metros we analyzed fell below the national average.

Baltimore, MD had the lowest overall health care price level in 2016, at 33% below the national average. To put this in context, prices in the most expensive metro (San Jose) were nearly 2.5 times higher than in Baltimore.

Distribution of Overall Price Levels in Select U.S. Metros, 2016

Find a Metro:

 

the national average in 2016

3

Within Metros, Price Levels Were Not Consistent Across Service Categories

To see whether prices were driven by a particular subset of services, we decomposed overall price levels in to three distinct service categories: inpatient, outpatient, and professional (clinician) services.

Some metros had consistently high or low prices across all service categories, such as Baltimore (below-average prices) and San Francisco (above-average prices).

Other metros had outlier price levels among the three service categories, like Dayton, OH (inpatient), El Paso, TX (professional), and Green Bay, WI (professional).

Price Levels by Type of Service in Select U.S. Metros, 2016

Find a Metro:

Highlight a service type:

 

Overall

 

Inpatient

 

Outpatient

 

Professional

Inpatient prices apply to services rendered to patients who are kept in a health care facility overnight for treatment but not for observation.

Outpatient prices apply to services rendered to patients by sections of a hospital that provide medical services not requiring an overnight stay or hospitalization (e.g., emergency room [ER], outpatient surgery, observation room).

Professional prices apply to services rendered to patients by a health care professional. Service claims with no valid revenue code are assumed to be professional services (e.g., office and preventative visits, administered drugs).

 

4

Growth and Price Level Were Not Always Related

One might expect that a metro with high price levels in 2016 experienced substantial price growth over time. Our analysis shows that was not always the case.

In the scatterplot below, each metro’s 2016 price level is shown along the x-axis, relative to the national average. The y-axis represents each metro’s cumulative price growth from 2012 to 2016. You’ll notice a weak correlation between the two indicators, across all service categories. Price growth did not necessarily come with high prices, and vice versa.

2016 Price Level vs. Five-Year Price Growth for Select U.S. Metros

Find a Metro:

Highlight a service type:

 

Overall

 

Inpatient

 

Outpatient

 

Professional

 

5

How Did Your Area Stack Up?

Interact with our Healthy Marketplace Index data to examine health care price trends in metro areas that you select. Or have us fill in metros similar to your selected area.

Compare Health Care Price Levels and Growth in Select U.S. Metros

 

Overall

 

Inpatient

 

Outpatient

 

Professional

Inpatient prices apply to services rendered to patients who are kept in a health care facility overnight for treatment but not for observation.

Outpatient prices apply to services rendered to patients by sections of a hospital that provide medical services not requiring an overnight stay or hospitalization (e.g., emergency room [ER], outpatient surgery, observation room).

Professional prices apply to services rendered to patients by a health care professional. Service claims with no valid revenue code are assumed to be professional services (e.g., office and preventative visits, administered drugs).

PERCENT OF NATIONAL AVERAGE

-50%
 
50%
 

Click to select

 

the national average in 2016

Similar prices to ___ and ___

 
 

Selected Metros

 

 

 

 

Fill with Similar Metros

Got it!

Select New Metros

Health Care Cost Institute

Our HMI price index provides the following key takeaways, for the 112 U.S. metros we studied:

  1. Overall health care price levels varied dramatically across metro areas in 2016.
  2. Within metros, price levels also varied among certain categories of health care services.
  3. The metros with highest price levels in 2016 were not necessarily the ones with the largest 5-year price growth.

This report and price index is the first release in a multi-part Healthy Marketplace Index series examining variation in key health care spending and market indicators among U.S. metro areas. Upcoming releases will offer comparisons of service use, total spending, waste, and provider competition.

2017 Health Care Cost and Utilization Report

 
Health Care Cost Institute

2017 Health Care Cost and Utilization Report State Spending Trends

Average annual health care spending for individuals with employer-sponsored insurance increased to an all-time high of $5,641 in 2017 — 16.7% higher than in 2013. That spending reflects expenditures for medical services and prescription drugs (but excludes manufacturer rebates for drugs).

Some states, however, had much higher per-person spending — Alaska topped the list in 2017 at $7,469. Others had much lower spending — average per-person spending in Hawaii was only $3,626.

This tool was designed as a companion to our annual Health Care Cost and Utilization Report to help you understand the health care spending in your state, and how it compares to the rest of the country.

Take some time to:

1. Explore state-by-state variation in average spending per person.
2. Compare growth in spending, utilization, and average prices from 2013 to 2017.
3. See what categories of services drove spending growth in each state.
4. Understand how inpatient, outpatient, professional services, and prescription drugs each contributed to differences in spending across the country.

Health Care Cost Institute

 

 

 

 

   

2017 Health Care Spending per Person by State

SPENDING PER PERSON IN 2017

$3,600
 
$7,500
 

National average of per-person spending was $5,641 in 2017. This total includes $1,097 for inpatient admissions, $1,580 for outpatient visits and procedures, $1,898 for professional services, and $1,065 for prescription drugs.

Spending on prescription drugs reflects the amount paid on the pharmacy claim, which includes discounts from the wholesale or list price, but does not account for manufacturer rebates.

 

  per person in 2017

States Ranked by Spending

 

___

___

2

Growth in Spending per Person Varied by State

At the national level, spending growth between 2013 and 2017 was driven by growth in average prices, while the utilization of health care services remained roughly the same. Spending increased in every state, but the growth varied from 10% in Rhode Island to 33% in North Dakota. Average prices also increased in every state between 2013 and 2017.

Although there was little change in the overall utilization of health care nationally, some states, such as New York, saw a 5% increase in utilization over the five years, and other states, like California, saw utilization decline by as much as 5%. Use the chart below to see how the changes in your state’s health care spending, utilization, and average prices compared to the national average.

Cumulative Growth in Spending per Person by State since 2013

Choose a state:

 

Spending

 

Utilization

 

Price

 

The measures of average prices presented here are adjusted for changes in the mix or intensity of services used for three of the four categories (the exception being prescription drugs, for which measures of intensity are not available).

Correspondingly, measures of utilization for those three categories were adjusted to capture both changes in the number of services used and changes in the mix and intensity of services provided.

Our measures of prescription drugs prices, however, include both spending on the same drugs, as well as spending on new, potentially innovative products, adopted over the report period.

Prescription drug spending is the amount paid on the pharmacy claim, which reflects discounts from the wholesale price, but not manufacturer rebates.

 

Selected State

 

U.S. Average

 

Selected State shows spending, utilization, and price for the selected state.

U.S. Average shows overall average spending, utilization, and price for the United States.

 

saw an increase of 50% in spending between 2013 and 2017.  

3

States’ Spending Growth Varied by Service Category

We decomposed overall health care spending into four service categories: inpatient, outpatient, professional (clinician) services, and prescription drugs. These service categories had different levels of spending growth between 2013 and 2017. Nationally, prescription drug spending had the highest growth at 28.9%, while inpatient spending experienced the lowest growth at 9.8%. Prescription drug spending is estimated from point-of-sale payments, which reflect discounts from the wholesale price, but not manufacturer rebates.

The charts below show how much per-person spending grew for each of the four service categories between 2013 and 2017. The inpatient spending is shown at the top, outpatient on the right, prescription drugs on the bottom, and professional services to the left. The blue shape represents the spending growth in the state; larger shapes correspond to higher spending growth. See how service category spending in your state and others grew since 2013.

Cumulative Spending Growth by Service Category in Each State since 2013

 

  in inpatient costs

This was     the national average.

State

 
 
 

State

 

State

 

4

Service Category Spending per Person Varied by State

The state-level geographic variation in per-person spending varies by service category. States that have high spending on one category may have relatively low spending on another. West Virginia, for example, has some of the highest inpatient and outpatient spending, but low spending per person on professional services.

In contrast, New York has high prescription drug and professional services spending, but low outpatient spending. See how your state’s spending compares on each of the four health care service categories and how that spending has changed over time.

2017 Spending per Person by Service Category

Choose a state:

 

 
 

Inpatient

 

Outpatient

 

Prescription Drug

 

Professional

   

Inpatient prices apply to services rendered to patients who are kept in a health care facility overnight for treatment but not for observation.

Outpatient prices apply to services rendered to patients by sections of a hospital that provide medical services not requiring an overnight stay or hospitalization (e.g., emergency room [ER], outpatient surgery, observation room).

Prescription Drug spending is estimated from point-of-sale payments, which reflect discounts from the wholesale price, but not manufacturer rebates.

Professional prices apply to services rendered to patients by a health care professional. Service claims with no valid revenue code are assumed to be professional services (e.g., office and preventative visits, administered drugs).

 

Selected State

 

U.S. Average

 

Selected State shows spending for the selected state.

U.S. Average shows overall average spending for the United States.

Got it!

COST PER PERSON 2017

 
 
 
 
 

 

  per person in 2017 on  

States Ranked by Spending

 

___

___

Average Annual Spending per Person on Inpatient Services in  

 

 

spent   per person in   on  

 

The U.S. Average was   per person.

2018 Health Care Cost and Utilization Report

 
Health Care Cost Institute

2018 Health Care Cost and Utilization Report State Spending Trends

Average annual health care spending for individuals with employer-sponsored insurance increased to $5,892 in 2018 - 18.4% higher than in 2014. That spending reflects expenditures for medical services and prescription drugs (but excludes manufacturer rebates for drugs).

Some states, however, had much higher per-person spending – Alaska topped the list in 2018 at $7,974. Others had much lower spending – average per-person spending in Arkansas was $4,734.

This tool was designed as a companion to our annual Health Care Cost and Utilization Report to help you understand the health care spending in your state, and how it compares to the rest of the country.

Take some time to:

1. Explore state-by-state variation in average spending per person.
2. Compare growth in spending, utilization, and average prices from 2014 to 2018.
3. See what categories of services drove spending growth in each state.
4. Understand how inpatient, outpatient, professional services, and prescription drugs each contributed to differences in spending across the country.

Health Care Cost Institute

 

 

 

 

2018 Health Care Spending per Person by State

SPENDING PER PERSON IN 2018

$4,700
 
$8,000

National average of per-person spending was $5,892 in 2018. This total includes $1,128 for inpatient admissions, $1,662 for outpatient visits and procedures, $1,985 for professional services, and $1,118 for prescription drugs.

Spending on prescription drugs reflects the amount paid on the pharmacy claim, which includes discounts from the wholesale or list price, but does not account for manufacturer rebates.

 

per person in 2018

States Ranked by Spending

 

___

___

2

Growth in Spending per Person Varied by State

At the national level, spending growth between 2014 and 2018 was primarily driven by growth in average prices (15.0%), while the utilization of health care services increased slightly (3.1%). Spending increased in every state, but the growth varied from 9.7% in Maine to 28.4% in New York.

Average prices also increased in every state between 2014 and 2018, with the highest price growth in the District of Columbia (20.6%) and the lowest in Louisiana (9.5%). Utilization increased in 45 states over 5 years. The change in quantity of health care services used ranged from a 6.0% decline in Maine to a 9.5% increase in Kansas.

Use the chart below to see how the changes in your state’s health care spending, utilization, and average prices compared to the national average.

The chart also includes trends of state and national GDP per capita, to provide additional context for comparing state level changes in health care spending.

Cumulative Growth in Spending per Person by State since 2014

Choose a state:

 

Spending

 

Utilization

 

Price

 

GDP Per Capita

The measures of average prices presented here are adjusted for changes in the mix or intensity of services used for three of the four categories (the exception being prescription drugs, for which measures of intensity are not available).

Correspondingly, measures of utilization for those three categories were adjusted to capture both changes in the number of services used and changes in the mix and intensity of services provided.

Our measures of prescription drugs prices, however, include both spending on the same drugs, as well as spending on new, potentially innovative products, adopted over the report period.

Prescription drug spending is the amount paid on the pharmacy claim, which reflects discounts from the wholesale price, but not manufacturer rebates.

 

saw an increase of 50% in spending between 2014 and 2018.

U.S. Average

saw an increase of 50% in spending between 2014 and 2018.

3

States’ Spending Growth Varied by Service Category

We split overall health care spending into four service categories: inpatient, outpatient, professional (clinician) services, and prescription drugs. These service categories had different levels of spending growth between 2014 and 2018. Nationally, prescription drug spending had the highest growth at 25.8%, while inpatient spending experienced the lowest growth at 11.4%. Prescription drug spending is estimated from point-of-sale payments, which reflect discounts from the wholesale price, but not manufacturer rebates.

The charts below show how much per-person spending grew for each of the four service categories between 2014 and 2018. The inpatient spending is shown at the top, outpatient on the right, prescription drugs on the bottom, and professional services to the left. The blue shape represents the spending growth in the state, and the black line shows the national average. Larger shapes correspond to higher spending growth. See how service category spending in your state and others grew since 2014.

Cumulative Spending Growth by Service Category in Each State since 2014

 

in inpatient costs

This was the national average.

State

 
 
 

State

 

State

 

4

Service Category Spending per Person Varied by State

The state-level geographic variation in per-person spending varies by service category. States that have high spending on one category may have relatively low spending on another. West Virginia, for example, has some of the highest inpatient and outpatient spending, but low spending per person on professional services.

In contrast, New York has high inpatient, prescription drug and professional services spending, but low outpatient spending. See how your state’s spending compares on each of the four health care service categories and how that spending has changed over time.

2018 Spending per Person by Service Category

Choose a state:

 

 
 

Inpatient

 

Outpatient

 

Prescription Drug

 

Professional

Inpatient prices apply to services rendered to patients who are kept in a health care facility overnight for treatment but not for observation.

Outpatient prices apply to services rendered to patients by sections of a hospital that provide medical services not requiring an overnight stay or hospitalization (e.g., emergency room [ER], outpatient surgery, observation room).

Prescription Drug spending is estimated from point-of-sale payments, which reflect discounts from the wholesale price, but not manufacturer rebates.

Professional prices apply to services rendered to patients by a health care professional. Service claims with no valid revenue code are assumed to be professional services (e.g., office and preventative visits, administered drugs).

 

Selected State

 

U.S. Average

Selected State shows spending for the selected state.

U.S. Average shows overall average spending for the United States.

Got it!

COST PER PERSON 2018

 
 
 

 

per person in 2018 on

States Ranked by Spending

 

___

___

Average Annual Spending per Person on Inpatient Services in

 

 

spent per person in on

 

The U.S. Average was per person.