Coloradans pay significantly more for health care than people in four other states that were analyzed as part of a new study, and the reason shows how difficult it will be to lower costs here.
Overall, when compared to other states in the study, health care costs in Colorado are 17 percent above average — making the state the biggest outlier, higher or lower, in the study.
The new report looks at the prices of particular health services, such as hospital stays or outpatient procedures. But it also examines how much people in the states use those services. Both factors have the potential to drive up spending but in different ways.
When analyzing spending in Maryland, Minnesota, Oregon and Utah, the researchers found that higher or lower amounts were usually driven by one factor. Maryland’s lower-than-average spending was driven by lower-than-average prices, for instance. Minnesota’s higher-than-average spending was the result mostly of people using health care services more frequently. And, in Oregon, higher prices were entirely canceled out by lower use.
But in Colorado, health care spending was a double-whammy. Not only were the prices for health care here more expensive but the use of health care services was also well above the group’s average, according to the study.
“So price and utilization are working together,” said Jonathan Mathieu, the vice president of research and compliance for the Colorado-based Center for Improving Value in Health Care, which participated in the study.
Mathieu said that shows the need for Colorado to tackle two distinct problems in order to lower health spending: what makes prices so high and what makes people go to the doctor so much.
The study was conducted by the national Network for Regional Healthcare Improvement. Colorado was included in the analysis in part because of a database here that collects large amounts of information on health care spending by Medicaid and private insurers in the state and that is run by Mathieu’s center. The data in the study covers spending only by private insurers.
Spending in Colorado is lowest along the Front Range and highest on the Eastern Plains and Western Slope, according to the study. The median per-member-per-month cost for private insurers in Colorado Springs, the least-expensive area, was $390. The same cost on the Eastern Plains, the most expensive area, was $591. The statewide median was $437.
But the dynamics behind the costs are different in each region. In the mountains, the study found that high health care spending is driven entirely by the prices for services. In Pueblo, higher-than-average costs are driven by utilization.
The study buttresses previous efforts to explain why Colorado — though repeatedly noted as one of the healthiest states in the country — has such high health care costs. A years-long effort by the Colorado Commission on Affordable Health Care concluded that officials here need to show “extraordinary public leadership” to deal with the many reasons for the increase.
