MNCM News

"The two words ‘information’ and ‘communication’ are often used interchangeably, but they signify quite different things. Information is giving out; communication is getting through." -- Sydney J. Harris

New Report Highlights Minnesota Health Care Cost Trends and Variation, with Overall Modest Increase in Cost Last Year

The total cost of medical care increased 3.4 percent from 2015 to 2016 for commercially-insured patients according to a new report released by MN Community Measurement (MNCM).

The report shows an increase in average costs for commercially-insured patients per month from $474 in 2015 to $490 in 2016. Growth in 2016 was lower than the previous year (5.6 percent), but higher than the 3.1 percent growth recorded in 2014.

“Although cost growth in 2016 was moderate compared to historical averages, affordability continues to be a major concern. This problem affects just about everyone, and it is one that we must work together to solve,” said Julie Sonier, MNCM President.

“This report is one way that MN Community Measurement is bringing the power of data, measurement and transparency to the health care affordability discussion here in Minnesota,” said Sonier.

The 2017 Cost and Utilization Report provides the most current comparable and validated cost of health care information, at a level of detail that provides a unique view of health care cost and the drivers of cost in Minnesota.

Report Highlights

The report includes several types of information on health care costs: average costs for 118 common medical procedures; the average total cost of care (TCOC); information on resource use and prices to provide insight and context for understanding variations or differences in total cost; and data on variations in utilization for specific types of services. These data are published at the statewide, regional and medical group levels.

Examples of findings in the 2017 Cost & Utilization Report include:

  • Costs for common medical procedures: There is substantial variation across medical groups in the amounts that they are paid for the same procedure. For example, the amount that providers are paid for an ankle X-ray averages $72, but ranges from $26 to $201. Similarly, the average payment for reading an eye chart was $6 in 2016, but ranged from $4 to $46 across different medical groups.
  • Total Cost of Care: Across the 122 medical groups included in this report, TCOC averaged $490 in 2016, with a range of $386 to $977 per patient per month on a risk adjusted basis. TCOC for men is lower than TCOC for women and lower for children than adults.
  • Resource use and price: Across medical groups, the analysis finds about a 70 percent variation in resource use and 90 percent variation in price, after accounting for patient risk.
  • Utilization of services: Analysis of emergency room use shows a three-fold difference in use after adjusting for patient illness.

“Better understanding of how much variation we have in our medical care system and what factors contribute to the variation is a starting point for strategies to make health care more affordable,” said Sonier. “The measures in this report provide unique insight for comparing and taking actions to manage and reduce health care costs.”

The report uses data from 2016 health insurance claims of more than 1.5 million commercially-insured patients (i.e. those with private health insurance, both individual and employer-sponsored) enrolled with four Minnesota health plans: Blue Cross and Blue Shield of Minnesota, HealthPartners, Medica and PreferredOne.

In addition to this report, MNCM publishes total cost of care and the average cost of 118 common medical procedures by medical group level on its consumer-oriented website, MNHealthScores.org.

View the current and previous MNCM cost of care reports here.