Thomson Reuters study of commercially insured finds large costs variations
ANN ARBOR, MI – Anderson, Ind., had the highest per capita healthcare cost for people with commercial health insurance, at $7,231 annually and residents of Odgen-Clearfield, Utah, the lowest at $2,623, according to a new study from Thomson Reuters.
The study, which is the first of its kind to assess the healthcare experiences and costs for more than 20 million people with employer-sponsored health insurance, found substantial spending disparities similar to those seen in previous studies of Medicare spending conducted largely by John Wennberg and Eliot Fisher for both the Center for Evaluative Clinical Services and the Dartmouth Atlas of Healthcare.
According to Raymond Fabius, MD, chief medical officer for the healthcare business of Thomson Reuters and one of the study's authors, the Thomson Reuters research didn’t correlate with Wennberg’s in terms of spending by region, which is sure to create more questions since “the industry has rested a lot of thinking on the work by Wennberg under the assumption that is was a fairly reasonable reflection of healthcare spending across the board.”
As such, the finding by Thomson Reuters contain a number of unexplained variations.
The study authors cited the McAllen, Texas, metropolitan area as one such example. In studies of Medicare spending, McAllen has been singled out as the highest cost city in the country. The Thomson Reuters research, however, showed it to be one of the 10 least expensive cities in the nation for individuals with employer-sponsored insurance.
"Studying these geographic variations can help us identify locations where healthcare costs are less, yet the quality of care and outcomes are not compromised. Understanding where, why and how medical care costs less can provide solutions to control our nation's healthcare spending," said Fabius.
The study found significant variations in spending patterns based on age group and type of expenditure. In Ocala, Fla., healthcare spending for children was 45 percent below the national average while spending for adults was 18 percent above average.
In addition, a common theory in healthcare is that higher outpatient spending would improve overall population health and would lead to lower outlays for inpatient services. Thomson Reuters, however, found that areas with high inpatient costs were also very likely to have high outpatient costs, a finding that puts that theory in question.
This information, however, may be somewhat in line with work by the Dartmouth Atlas that has shown more care for people with chronic conditions leads to poorer outcomes and increased risk for earlier death.
“You have to ask the question: What is the science that says more is better at the patient level?” Wennberg told Dartmouth Medicine a publication of the Dartmouth Medical School. “The evidence simply isn’t there. We do not have science that says: ‘if you do this, and that, and that you get better outcomes for patients with chronic illness.’”
Likewise, it seems from the Thomson research, more dollars spent for out-patient care does not decrease the spending for in-patient services and may not be improving their overall quality of care. If anything, the new research suggests that the costs for medical services may differ significantly for people with private insurance versus those using Medicare.
"There are some unexpected findings here,” said Bill Marder, senior vice president for research services at Thomson Reuters and lead author. “The bottom line is that it's risky to set policy based solely on Medicare evidence, because we're seeing a different picture when we look at other patient populations. We clearly need to do more in-depth research to better understand how these complex spending variations translate into variations in value for patients."