Coloradans With Private Health Insurance Paying Significantly More Than Their Medicare Neighbors for the Same Procedure

New CIVHC Analysis Shows Commercial Insurance Prices $55,000 Higher than Medicare in Some Areas

Feb 12, 2016, 13:26 ET from Center for Improving Value in Health Care (CIVHC)

DENVER, Feb. 12, 2016 /PRNewswire-USNewswire/ -- A new report from the Center for Improving Value in Health Care (CIVHC) reveals significant variation in payments for hip and knee replacements between private health insurance payers and Medicare. Coloradans with private insurance in the northeast pay $55,000 more than their neighbors with Medicare while those in Denver pay $17,000 over Medicare prices.

Recent national studies have revealed little to no correlation between Medicare and commercial payer health care spending in the same region.  In particular, areas like Grand Junction, Colorado, historically praised for its low cost to treat Medicare recipients, have come under recent scrutiny for higher than average commercial health care costs relative to other areas in the state and nation.

According to the new report, the Western Slope of Colorado, which encompasses Grand Junction, has the third highest commercial costs in the state after the northeast and mountain regions. Coloradans with commercial insurance along the Western Slope pay around $47,000, or $26,000 more than Medicare recipients receiving a knee or hip replacement. In the mountain region, the disparity between commercial insurance and what Medicare pays is over $43,000 more, and in the northeast it's over $55,000 more (equating to a 232 percent markup).

Some variation in costs across regions is expected due to higher cost of living, the relative health of the population and other factors; however, it's not readily apparent why commercially insured Coloradans in the northeast pay twice as much ($78,000) as their neighbors in the southeast ($39,000) for the same service.

"Identifying such dramatic fluctuations in prices between payers gives us an opportunity to ask why this is happening, whether it's warranted and where we have opportunities to reduce costs and improve care," stated Ana English, CIVHC CEO and president.

Many groups in the state, including the Colorado Commission on Affordable Health Care, are looking at data in the CO APCD and elsewhere to pinpoint where Colorado can make improvements. This latest study suggests that at a minimum, higher-cost regions have opportunities to explore what drives increased spending locally, and to investigate what practices lower-cost regions use to keep costs down.

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SOURCE Center for Improving Value in Health Care (CIVHC)