Why does health care cost more in some areas of the country than others? It’s a question researchers have struggled with for decades, because the potential answers — unnecessary surgeries, generally bad health of patients or high prices charged by providers — each carry different prescriptions for how to hold down medical costs.
Now a new study from the Center for Studying Health System Change takes a novel approach by comparing claims among 218,000 autoworkers in 19 metropolitan areas. Because the autoworkers had the same private health plan through their union, the study didn’t have to worry about how different insurance benefits influenced health spending.
The study found a wide variance in the health spending per autoworker in 2009, from $4,500 in Buffalo, N.Y., to $9,000 in Lake County, Ill. (The full list is at the bottom of this post.)
Difference in provider prices, particularly among hospitals, accounted for a third of the variation. Hospitals in Lake County, for instance, charged 2 1/2 times what Medicare paid, while hospitals in Syracuse charged 30 percent more than Medicare did. (The variation among doctors’ prices wasn’t nearly as great.)