MN Community Measurement’s annual health care cost report highlights substantial variation across health care providers
MINNEAPOLIS (November 10, 2020) – MN Community Measurement (MNCM), an independent nonprofit organization that empowers health care decision makers with meaningful data to drive improvement, has released its annual report comparing health care costs, utilization, and prices across medical groups in Minnesota.
The Health Care Cost & Utilization in 2019 report highlights overall cost trends in 2019 for Minnesotans with private health insurance coverage. Using data for over 1.4 million people with a total of $10.3 billion in health care spending, the report compares results for 114 medical groups. An appendix to the report includes detailed information on cost and utilization by medical group.
Key findings in the report include the following:
- Statewide, the total cost of care (TCOC) for people with private insurance increased by 5.2 percent in 2019, to an average of $627 per person per month ($7,524 per year). All of the major categories of health care services – inpatient hospital, outpatient hospital, prescription drugs, and professional services – grew more slowly in 2019 than in 2018.
- Even after adjusting for differences in patient complexity, there is substantial variation in TCOC across health care providers and across regions of the state. TCOC in the St. Cloud area was 8.3 percent below the statewide average, while the Rochester area saw TCOC that was 45.0 percent above average. Prices are a stronger driver of variation in TCOC than utilization of health care services.
- Prices paid by private insurance are much higher than prices for the same services paid by Medicare, and the gap is growing. For the set of services that MNCM has tracked since 2014, prices are now nearly twice as high as the rates paid by Medicare.
In addition to reporting on TCOC, MNCM also publishes information about prices of individual health care services, to help consumers shop for care. This information, along with TCOC by medical group, is available at MNCM’s consumer-facing website www.mnhealthscores.org. Both types of information are important for different reasons. Individual consumers are increasingly responsible for significant out of pocket costs, and so having information to help with price comparisons and shopping is helpful. But the total cost of care measure is important for capturing variation in overall cost-effectiveness across medical groups since it takes into account not just prices but how much and what kinds of services are provided.
“Minnesota is one of only a few states in the nation where this type of information is publicly available,” said Julie Sonier, President and CEO of MN Community Measurement. “Because we work with all stakeholders and do our work using objective, transparent methods, we’re able to serve as a trusted source of information on health care cost and quality.”
“A diverse group of Minnesota’s health care leaders worked collaboratively to support this report from Minnesota Community Measurement,” said Lucas Nesse, President and CEO of the Minnesota Council of Health Plans. “This commitment to measure cost and quality not only gives consumer a transparent look at the quality and cost of care, but it helps providers assess their performance to ensure improved outcomes.” Health plans that participated in MNCM’s TCOC analysis for 2019 include Blue Cross Blue Shield of Minnesota, HealthPartners, Medica Health Plans, and PreferredOne.
Importance of Measurement
Measuring and reporting on health care cost and quality is important because it helps consumers know how care varies across providers, and it helps providers to understand how their results compare to others and where their biggest improvement opportunities are. Measuring and reporting also help health plans and other purchasers better understand and improve value for money that is spent on health care.
“Minnesota is really unique in the nation in the capabilities we’ve built to measure and report on health care outcomes,” said Sonier. “The measures we track are important tools for getting better health outcomes.”
About MN Community Measurement
MN Community Measurement (MNCM) is a nonprofit organization dedicated to empowering health care decision makers with meaningful data to drive improvement. A trusted source of health care data since 2005, MNCM works with doctors, hospitals, clinics, insurance companies, and state agencies to collect, analyze, and report health care data related to health care quality and cost. Learn more at www.mncm.org.
