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St. Louis: A High Value Health Care Community? Prices for Medical Services Below National Averages

Posted By Louise Probst, Thursday, May 4, 2017
report from the Health Care Cost Institute (HCCI) illuminates commercially-insured price differences for three categories of health care services across 61 regions between 2012 and 2014. Communities can now understand how prices for physician, inpatient, and outpatient services compare over time and to other regions. Marked variation in price levels exist among the three categories and across regions when indexed. For instance, when the national average is set to one, the spread across high and low price regions can vary more than 70 points. This variation is important to understand since research shows that higher prices do not correlate with better health outcomes or care quality. 

Prices in St. Louis, as in many Midwestern communities, were below the national average in all three categories in each year. This speaks positively about the value of health care in the Midwest since we know that, on average, quality scores in St. Louis mirror national averages. What we don't know is how these price differences compare when adjusted for wage and other cost of living factors. Also important to note: price comparisons are not the same as total cost of care comparisons (PMPM cost), since they exclude service utilization. Differences in illness burden, patient expectations, and provider practice patterns drive important differences in total cost. Midwest Health Initiative data suggests St. Louis has higher utilization patterns than many communities, even after adjusting for illness burden. A final observation is that St. Louis' price-competitive edge has eroded somewhat during this time. While its prices are still below the national average, they have moved closer to it, suggesting higher price increases over the last three years than other communities. 

Employers can use this information to compare their own experience in St. Louis and other communities where they have a significant workforce presence (mapping tool available here). If you have data on spending for your population in physician, inpatient, and outpatient categories, the BHC would like to help you look at your data as compared to HCCI findings. Please call Patti Wahl for assistance. HCCI is committed to creating insights that are meaningful to employers. The BHC appreciates the opportunity it has to bring an employer perspective to HCCI's work. 

Warm regards,

Louise Probst
BHC Executive Director


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