High medical costs equal increased health care spending

Recent growth in commercial health care spending is largely due to increased costs of medical services, not increased use, a recent American Journal of Managed Care study found.

Researchers at the Dartmouth Institute for Health Policy & Clinical Practice used a novel method for measuring health care spending and utilization data among all commercially insured beneficiaries in Maine, New Hampshire and Vermont from 2008 to 2010.

The method stripped data of protected health information in favor of a standardized approach.

They used the same approach to examine spending among Blue Cross Blue Shield beneficiaries in Michigan from 2009 to 2010, and in Texas from 2008 to 2010.

“Our study provides a mechanism for promoting provider accountability on prices through increased transparency and facilitates research on interventions designed to reduce the total cost of care,” Carrie Colla, PhD, assistant professor at the Dartmouth Institute and lead author of the study stated in a new release. “We believe we have developed a model that will make it cost-effective and safe for commercial insurance companies to share their data with researchers on an ongoing basis.”

Colla said there is increasing concern that consolidation in the health care marketplace may lead to increased prices for payers and consumers.

She believes this study opens an avenue for evaluating the effects of commercial health care reform efforts and understanding spending and utilization changes in local communities.

“Our hope is that with this methodology we can engage in reporting of timely, relevant health care spending and utilization data at the local level,” she said.

This is a pilot effort to extend the Dartmouth Atlas of Health Care to the commercially insured population.

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