Work

The Relationship between Commercial Health Care Prices and Medicare Spending and Utilization

Year: 2014

Type: article

Abstract: OBJECTIVE: To explore the relationship between commercial health care prices and Medicare spending/utilization across U.S. regions. DATA SOURCES: Claims from large employers and Medicare Parts A/B/D over 2007-2009. STUDY DESIGN: We compared prices paid by commercial health plans to Medicare spending and utilization, adjusted for beneficiary health and the cost of care, across 301 hospital referral regions. PRINCIPAL FINDINGS: A 10 percent lower commercial price (around the average level) is associated with 3.0 percent higher Medicare spending per member per year, and 4.3 percent more specialist visits (p < .01). CONCLUSIONS: Commercial health care prices are negatively associated with Medicare spending across regions. Providers may respond to low commercial prices by shifting service volume into Medicare. Further investigation is needed to establish causality.

Source: Health Services Research

DOI: 10.1111/1475-6773.12262

Authors: John A. Romley, Sarah Axeen, Darius N. Lakdawalla, Michael E. Chernew, Jay Bhattacharya, Dana P. Goldman

Institutions: University of Southern California, Harvard University, Stanford Medicine, Stanford University

Language: English

Topic: Healthcare Policy and Management

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Good health and well-being

Open Access status: bronze

Funders: University of Southern California, Harvard University, Leonard D. Schaeffer Center for Health Policy and Economics, National Institute on Aging