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Health Think Tank Crunches Health Prices For The Masses

May 21, 2012

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A chart shows that prices drive gown in health spending.

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It turns out we may not know nearly as much about all the money spent on health care in the U.S. as we thought we did.

But there's a new group that wants to, well, remedy that.

The problem, Martin Gaynor, chairman of the Health Care Cost Institute, told Shots, is that "two-thirds of the population has private [health] insurance, but most of the information comes from Medicare."

That's because Medicare, being government run, is the only large insurer whose claims information has been available for academics to crunch. In fact, it's been the detailed analysis of Medicare data that's has allowed the Dartmouth Atlas to show the wide variations in health care across the U.S.

Still, many have worried that what happens to people age 65 and over may not necessarily reflect what's happening to everyone else.

So Gaynor, who's also a professor of economics and health policy at Carnegie Mellon University in Pittsburgh, along with a small group of academics, persuaded four of the nation's largest private health insurers — Aetna, Humana, UnitedHealthcare and Kaiser-Permanente — to give them access to information about what the insurers paid for care given to some 40 million people. (Personal information has been removed from the database.)

"That's 40 percent of the privately insured population in the U.S.," Gaynor said.

The group's first study, which examines spending and use trends in 2010 in the under-65 population, is already finding trends that would be hard to discern from Medicare data.

The first big take-home message, said Gaynor, is that while spending went up relatively slowly — about 3.3 percent — the biggest factor was an increase in "prices to providers." In other words, people didn't get more care, but they and their insurers paid more for the care they got. That also showed up in the fact that individuals' out-of-pocket spending grew slightly.

Prices rose for both inpatient and outpatient surgical procedures; for emergency room visits, and for brand-name prescription drugs from 2009 to 2010. Generic drugs were about the only category for which prices fell, 6.3 percent.

Some analysts, like Aaron Carroll, are already using the new numbers to worry about potentially ominous trends in the health care system.

Another of the more provocative findings in the study is that spending rose fastest — 4.5 percent — for the 18 and under age group, something you'd never find in Medicare data. That rise compares to 3.1 percent for those aged 55-64 and 2.3 percent for those aged 19-44.

Why? Gaynor says an answer will take more research.

And HCCI says it will be happy to share what it expects to be a twice-a-year data dump with other academics and nonprofit research outfits. "Our goal is to create a data resource," he says.

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