The Study of Factors Influencing the Total Cost of Health Care
With support from the Commonwealth Fund, researchers from HFMA, Leavitt Partners, and McManis Consulting undertook a combined quantitative and qualitative analysis of factors that may be influencing total cost of care in healthcare markets across the United States. The study’s quantitative analysis drew upon Medicare cost data and commercial cost data for more than 900 core-based statistical areas (CBSAs) across the country, focusing on a three-year period from Jan. 1, 2012, through Dec. 31, 2014. The quantitative analysis considered, first, the impact of the penetration of population-based value-based models on total cost of care and second, the impact of market-specific factors ranging from health plan and hospital concentration to socioeconomic status to the prevalence of chronic diseases.
The qualitative analysis was based on interviews with health plan, clinician, employer, state agency, and health system and hospital leaders in nine geographically and demographically diverse markets, including Baton Rouge, La.; Billings, Mont.; Grand Rapids, Mich.; Huntsville, Ala.; Los Angeles, Calif. Minneapolis/St. Paul, Minn.; Oklahoma City, Okla.; Portland, Maine; and Portland, Ore.
The study produced the following key findings:
- The penetration of population-based value-based payment (VBP) models is not yet having an impact on curbing growth in total cost of care.
- Although more time and evidence are needed to prove the efficacy of population-based VBP models, there are other models that may be more appropriate for different populations.
- Lower-cost markets appear to benefit from competition among health systems with well-organized provider networks and geographic coverage across their market.
- Lower cost markets also appear to benefit from organized mechanisms for more transparent sharing of information on provider quality and costs.
- Healthcare leaders across markets believe that further changes to payment and care delivery models are inevitable and will likely include value-based components.
Read the full report, What Is Driving Total Cost of Care? An Analysis of Factors Influencing Total Cost of Care in U.S. Healthcare Markets.