The paper is scheduled to be released by the National Bureau of Economic Research this month.
The study’s writers concluded: “First, information about Medicare spending and the factors that drive it to vary are of limited use in understanding health spending on the privately insured. There has been a general assumption both by policy-makers and in the literature that what we observe for Medicare broadly applies to spending on the privately insured. Our work shows that this is clearly not the case. Indeed, many geographic areas that have received public attention for being low spending on the Medicare population, such as Grand Junction, Colo., La Crosse, Wis., and Rochester, Minn., {home of the Mayo Clinic} have high spending on the privately insured.
“Second, much more research is needed in order to analyze the spending and 34 prices facing the privately insured. Our work represents an initial foray into understanding the cross sectional variation in health care spending, but more work is needed to better understand the factors driving the growth in private spending over time.
“Third, it is important to assess the causal drivers of hospital transaction prices, particularly the role of provider market structure and public payment rates. In terms of policy, our work suggests that vigorous antitrust enforcement is important and that hospital prices could be made more transparent. There is evidence that higher deductibles and cost sharing alone will not likely encourage shopping by patients ….
However, more information, such as recent efforts in Massachusetts to make hospitals’ prices public, could help patients and their agents make more informed choices over treatment and put downward price pressure on more expensive hospitals in a sector of the economy where consumers (patients) presently know almost nothing about what they or their insurer will pay for care. ”
