Healthcare prices vary widely between different regions, according to a new analysis.
The Health Care Cost Institute and Robert Wood Johnson Foundation have issued the first part of their series on the healthcare marketplace, and in it they analyzed prices across 112 U.S. metro areas.
Researchers found that price variance was extended to notable differences in cost and cost growth for certain procedures.
For example, prices for physician services or ambulatory care in Green Bay, Wisconsin, were 43% above the national average, while prices for inpatient and outpatient care were, respectively, 16% and 7% below the national average. Overall prices were highest in three cities: San Jose, California, and Anchorage, Alaska, where prices were 65% higher than the national average, and San Francisco, where prices were 49% higher.
Bill Johnson, Ph.D., author of the study and a senior researcher at HCCI, told FierceHealthcare that some variation was expected, but just how much the researchers found came as a surprise.
“It kind of drives home this idea that healthcare is local,” Johnson said.
In some regions, the trend was the opposite. In El Paso, Texas, the price for professional services was 19% under the national average, while the price for inpatient or outpatient care was 21% higher.
In addition, the HCCI researchers found that price growth and the prices themselves were not intertwined. The regions with the highest prices often experienced the lowest rates of growth, according to the study.
For example, healthcare prices in New York City were 10% higher than the national average, while prices grew at a rate 3% below than the national average.
By comparison, prices in Tampa, Florida, were 3% under the national average but grew at a rate 21% higher than average.
HCCI’s data has been built into a digital tool that stakeholders across the system—including patients—can use to sift through pricing information and compare different metropolitan areas included in the study.
Kevin Kennedy, a researcher at the institute, told FierceHealthcare that allowing patients, providers and others to digest and compare the data was crucial because of the high levels of variability.
“There’s this assumption that healthcare is expensive, but there’s not necessarily a great place to find that information,” Johnson said. The tool offers “a place people can actually go and play around with the data.”