Thomson Reuters Identifies Most- and Least-Expensive Healthcare Markets in U.S.

ANN ARBOR, Mich., Aug. 10, 2011 /PRNewswire/ — A study released today has found vast differences from one city to the next in the amount spent on healthcare for Americans with employer-sponsored health plans.

The Healthcare business of Thomson Reuters conducted and funded the study, which assessed the use and cost of healthcare services for 23.5 million Americans in 382 metropolitan statistical areas (MSA) in 2009.

The MSA with the lowest healthcare spending for the commercially insured — $2,623 per person — was Ogden–Clearfield, Utah. The highest spending MSA was Anderson, Indiana, at $7,231 per person.

Here are the 10 highest- and lowest-spending regions in the U.S. for people with employer-sponsored health insurance along with their annual healthcare costs per person:

“Studying these geographic variations can help us identify locations where healthcare costs are less, yet the quality of care and outcomes are not compromised.  Understanding where, why, and how medical care costs less can provide solutions to control our nation’s healthcare spending,” said Ray Fabius, M.D., chief medical officer for the Healthcare business of Thomson Reuters and one of the study’s authors.

Research dating back to the 1970s has documented geographic variations in the cost and use of healthcare among Medicare recipients. The Thomson Reuters study is the first of its kind to assess the healthcare experience of more than 20 million people with employer-sponsored insurance. It found substantial spending disparities similar to those seen in the Medicare population — but with different underlying patterns.

For example, previous research has identified McAllen, Texas, as having the highest Medicare spending in the nation, but the Thomson Reuters study found McAllen to be among the 10 lowest spending communities for individuals with employer-sponsored health insurance.

Spending patterns also varied significantly by age group and type of expenditure. In Ocala, FL, for example, healthcare spending for children was 45 percent below the national average and spending for adults (age 18-64) was 18 percent above average.

Meanwhile, locations with high inpatient costs were likely to also have high outpatient costs, debunking the theory that high outpatient spending tends to limit or offset the use of inpatient services.

“There are some unexpected findings here. The bottom line is that it’s risky to set policy based solely on Medicare evidence, because we’re seeing a different picture when we look at other patient populations,” said Bill Marder, PhD., senior vice president for research services at Thomson Reuters and lead author of the paper. “We clearly need to do more in depth research to better understand how these complex spending variations translate into variations in value for patients.”

The researchers utilized the Thomson Reuters MarketScan® databases, a repository of healthcare claims representing the real-world healthcare experience of millions of Americans.

For a copy of the full study, visit http://thomsonreuters.com/content/healthcare/pdf/white_papers/474284