Measuring Prices in Health Care Markets Using Commercial Claims Data

Abstract OBJECTIVE: To compare methods of price measurement in health care markets. DATA SOURCES: Truven Health Analytics MarketScan commercial claims. STUDY DESIGN: We constructed medical prices indices using three approaches: (1) a "sentinel" service approach based on a single common service in a specific clinical domain, (2) a market basket approach, and (3) a spending decomposition approach. We constructed indices at the Metropolitan Statistical Area level and estimated correlations between and within them. PRINCIPAL FINDINGS: Price indices using a spending decomposition approach were strongly and positively correlated with indices constructed from broad market baskets of common services (r > 0.95). Prices of single common services exhibited weak to moderate correlations with each other and other measures. CONCLUSIONS: Market-level price measures that reflect broad sets of services are likely to rankmarkets similarly. Price indices relying on individual sentinel services may be more appropriate for examining specialty- or service-specific drivers of prices.