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

First-in-the-Nation Health Care Cost Comparison Highlights How Minnesota Compares to Other Regions

A first-ever comparison of what commercial insurers are paying for healthcare in different regions shows wide variation in spending. This report is valuable as a first attempt to compare costs across regions.

The report from the Network for Regional Healthcare Improvement (NRHI), a national organization of local groups working to improve healthcare, analyzed spending by commercial health insurance plans in five different regions nationwide (Utah, Maryland, St. Louis, Minnesota and Oregon). Analysts found a $1,080 yearly difference in the amount plans spend, on average, per enrollee, with a high of $369 per-enrollee-per-month in Minnesota and a low of $279 in Maryland.

“Identifying regional differences in healthcare costs is important because high costs are depleting family budgets. Entire communities pay the price as money that could go to schools, housing and other needs are instead eaten up by healthcare costs. This information will enable physicians to identify cost drivers, address them, and get better outcomes. This enables a transformation in healthcare delivery, enabling better care decisions while potentially saving individuals, employers and other private payers hundreds of millions of dollars.” Elizabeth Mitchell, president and CEO of NRHI

Regional variation on medical spending has long been shown to exist in the Medicare market, but differences in the amount commercial insurers pay for care has been difficult to decipher, because multiple insurance plans participate in a single market.  This project was important as a technical learning opportunity about how to standardize reporting across regions.

The data within the report are detailed in From Claims to Clarity: Deriving Actionable Healthcare Cost Benchmarks from Aggregated Commercial Claims Data, which was developed with support from the Robert Wood Johnson Foundation.