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The Relationship between Commercial Health Care Prices and Medicare Spending and Utilization
Author(s) -
Romley John A.,
Axeen Sarah,
Lakdawalla Darius N.,
Chernew Michael E.,
Bhattacharya Jay,
Goldman Dana P.
Publication year - 2015
Publication title -
health services research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.706
H-Index - 121
eISSN - 1475-6773
pISSN - 0017-9124
DOI - 10.1111/1475-6773.12262
Subject(s) - health care , business , health services research , actuarial science , medline , public economics , medicine , economics , economic growth , political science , law
Objective To explore the relationship between commercial health care prices and Medicare spending/utilization across U.S. regions. Data Sources Claims from large employers and Medicare Parts A/B/D over 2007–2009. Study Design We compared prices paid by commercial health plans to Medicare spending and utilization, adjusted for beneficiary health and the cost of care, across 301 hospital referral regions. Principal Findings A 10 percent lower commercial price (around the average level) is associated with 3.0 percent higher Medicare spending per member per year, and 4.3 percent more specialist visits ( p < .01). Conclusions Commercial health care prices are negatively associated with Medicare spending across regions. Providers may respond to low commercial prices by shifting service volume into Medicare. Further investigation is needed to establish causality.