Providers jack up prices even as demand for services drops

Much of healthcare inflation in recent years may be attributed to prices charged by hospitals and like providers, reported Kaiser Health News.

A study by a new non-partisan think tank, the Health Care Cost Institute, concluded that prices rose overall even as demand for services declined during the severe economic downturn. Overall per capita healthcare costs increased 3.3 percent between 2009 and 2010, about three times the annual overall inflation rate, according to the study.

Costs for emergency room visits, outpatient surgery and children's care rose at rates about five times higher than inflation, noted KHN. Pediatric care rose at the highest rates.

"This lets us develop a clearer picture of what is truly driving healthcare spending in the United States," HCCI Chairman and Carnegie Mellon University professor Martin Gaynor said Monday in a research announcement. "Healthcare spending is a critical problem--it's not an exaggeration to say that if we solve the health care spending problem we solve our fiscal problems."

Chapin White, a senior researcher with the Center for Health System Change, said those with employer-based coverage "are paying more and getting less," noted KHN.

The cost data is based on 3 billion claims processed by Aetna, Humana and UnitedHealth and represents about 20 percent of all people with commercial insurance. It does not include Medicare, Medicaid or those with individual health coverage.

To learn more:
- read the Kaiser Health News article
- here's the research announcement
- check out the study (.pdf)