The Relationship Between Commercial Health Care Prices and Medicare Spending and Utilization

Abstract OBJECTIVE: To explore the relationship between commercial health care prices and Medicarespending/utilization across U.S. regions. DATA SOURCES: Claims from large employers and Medicare Parts A/B/D over 2007-2009. STUDY DESIGN: We compared prices paid by commercial health plans to Medicare spending andutilization, adjusted for beneficiary health and the cost of care, across 301 hospital referral regions. PRINCIPAL FINDINGS: A 10 percent lower commercial price (around the average level) is associated with 3.0 percent higher Medicare spending per member per year, and 4.3 percent more specialist visits (p