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Health Care Service Prices Vary Widely Across Colorado and Are Driven By More Than Geography and Volume

Source: The Center for Improving Value in Health Care (CIVHC)
Media Contact:
Cari Frank
303.903.6007 cfrank@civhc.org

DENVER – JANUARY 11, 2017 – In a new report,  the Center for Improving Value in Health Care (CIVHC) reveals that payments for health care services vary widely across Colorado and it’s impossible to draw general conclusions about health care prices based solely on geography or volume of services performed.

Recent studies have shown that residents in certain areas of Colorado pay more for certain procedures. Based on this information, it is easy to conclude that all health care costs in those regions are higher than the rest of the state. However, CIVHC’s new report indicates that additional factors must be explored to better understand price variation.

The analysis, originally provided to the Colorado Commission on Affordable Health Care, used data from the Colorado All Payer Claims Database (CO APCD) and focused on commercial claims for high volume procedures and services in six regions across Colorado: Western Slope, Mountain, Denver, Colorado Springs, Northeast Colorado, and Southeast Colorado.

Median payments made by commercial health insurance companies and their Colorado members suggest that while one health care service may be particularly high in one region of the state, other services may be right in line with - or actually lower than - the state median.

For example, in 2014, the Western Slope had the highest median paid amount for brain MRIs, yet this region was not the highest cost region for any other service analyzed.

Similarly, while residents of Northeast Colorado paid thousands of dollars more than the statewide median for dorsal/lumbar spinal surgeries as well as knee and hip replacements, they were not the highest cost region for colonoscopies or head CT exams.

Further demonstrating the inconsistency, the Colorado Springs region had the lowest prices for colonoscopies and dorsal/lumbar spine fusion, yet they were the highest for abdominal echo exams.

It’s been thought that a higher volume of services ultimately reduces health care prices, but the new CIVHC report seemingly contradicts this assumption. The report found that prices were highest in the lowest volume regions for only six of the ten services analyzed.

CIVHC also investigated price variation from 2010-2014 and discovered that prices across regions were again inconsistent with some regions going both up and down during the years analyzed. This finding serves to validate the conclusion that more than simply geography and volume is driving health care pricing.

“This report underscores the need to better understand the drivers behind these fluctuating health care costs so that we can address the disparities,” said Ana English, CIVHC CEO. “As an organization, we are committed to providing this type of compelling information in order to inform efforts to move all of Colorado toward a value-based health care system.”

About CIVHC
CIVHC (civhc.org) is a nonprofit, nonpartisan organization that helps Colorado identify ways to pay for, deliver and select high value health care. Through the pioneering Colorado All Payer Claims Database, we offer the state’s most comprehensive health care cost, quality and utilization claims data. We unlock information and provide tools and insights that guide meaningful action to improve health, enhance quality and lower cost. Bringing together a broad spectrum of organizations and individuals to design and drive collective change, CIVHC is devoted to a single cause: advancing an exceptional health care system for Colorado.
 

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