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    Medicine and the market: New data show the price ain’t right


    Henry Rosevear, MDHenry Rosevear, MD

    Urology Times Blogger Profile

    Dr. Rosevear is a urologist in community practice in Colorado Springs, CO.

    I recently read what I think is 2015’s best article regarding the business of health care. “The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured,” by Zack Cooper, PhD, and colleagues, uses claims data to analyze the variation in hospital prices across geographical areas. Its conclusions include the not very surprising statement that there exists significant price variation for identical services based on geographical area and the observation that markets that are dominated by a single hospital system have higher prices. 

    Read: Is bigger better in today’s urology practice?

    So why is this such a great article? Why do I think that every residency director should include this article in next month’s journal club and all of us small-town urologists should take 10 minutes to read it? Because this article will change the debate regarding the best way to regulate the cost of health care.

    First, some background, and for this let me send you to a great New York Times article, “The Experts Were Wrong About the Best Places for Better and Cheaper Health Care.” It is well documented that Medicare health care costs vary significantly across geographical regions. The best research on this topic is done at The Dartmouth Atlas of Health Care, which has an incredible interactive website that allows you to look at Medicare health care costs by region, hospital, or topic. This data allows researchers to then identify hospitals and regions that provide excellent care (for Medicare patients) at low costs.

    While this is excellent data and the researchers at Dartmouth deserve significant credit for compiling it, the data they use is inherently limited because, as noted in the Cooper article, Medicare covers only 16% of the population and only 20% of health care spending. Hence, while no one is questioning the validity of the data presented by the Dartmouth Atlas of Health Care, many groups have questioned its relevance given its limited applicability to the real world, where 60% of the population has private health insurance.

    Next: What makes this article so interesting?

    Henry Rosevear, MD
    Dr. Rosevear, a member of the Urology Times Clinical Practice Board, is in private practice at Pikes Peak Urology, Colorado Springs, CO.


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