HCCI: Prices for care vary widely across country

Some states pay more than twice as much for identical healthcare services than others, raising questions about what each state can do to better control their costs.

The new price book by the Health Care Cost Institute (HCCI) concluded that 20 percent of the healthcare services delivered in Wisconsin and New Hampshire cost twice as much as the nationwide average. Imaging, radiology and laboratory tests show the greatest nationwide variation.

The enormous variations have prompted some leading healthcare policy officials in a recently published blog post for Health Affairs to advocate for state-level reforms to better control costs.

"State-level reforms can be tailored to work best for each state, depending on its size and demographics and the structure of its insurance markets. States also have considerable authority over the regulation of health insurance and the provision of healthcare within their borders," said the post, which was co-authored by Zeke Emanuel, M.D., a fellow at the Center for American Progress.

Among the article's recommendations: Implement bundled payments for all payers; institute global budgets for hospitals; launch all-claims databases; and improve overall price transparency.

However, the likelihood of states adopting such reforms seem remote. Maryland is the only state that undertakes global budgeting for hospitals, despite the success it has shown in controlling costs. And Vermont's attempt to establish an all-claims database led to a U.S. Supreme Court decision concluding that individual insurers do not have to submit data. 

It also appears that many states try to suppress healthcare prices rather than discuss them. Data from nine states--20 percent of the total--was excluded from the HCCI study: Alabama, Hawaii, Idaho, Michigan, Montana, South Dakota, Vermont, Wyoming and Arkansas.

"Some states data are locked up," HCCI Executive Director David Newman said in a statement. "This byzantine behavior stands in the way of efforts to pursue transparency and understand the root causes of rising healthcare spending."

To learn more:
- read the HCCI statement 
- here's the HCCI price book (.pdf)
- check out the Health Affairs article