Hospital Prices Rise But Hospital Admits Drop

By Tara Fugate

Tara Fugate
Tara Fugate
MNA Strategic Researcher

MNA Strategic Researcher


According to a new report, hospital prices went up even though usage of healthcare actually went down.  Sadly, the takeaway shows that what a patient pays for healthcare determines how much they’re able to seek care and actually be healthy.  The Health Care Cost Institute (HCCI) report, “Healthy Marketplace Index,” analyzed more than 1.8 billion commercial claims from 2012 to 2016, HCCI’s report shows commercial healthcare prices increased by 13 percent (almost 3 times faster than inflation) while utilization of services dropped 17 percent nationwide.


It’s not just what healthcare costs that matters either.  Where it’s delivered also matters.  The data analysis reveals that Metro areas vary greatly in their rates of price increase and utilization of services, (or rate of people that are seeking care).  Healthcare spending is both the product of cost of services as well as how frequently those services are used.  To show a complete picture, HCCI considers price and usage levels side-by-side in order to explore how price and usage are linked. For example, do people in metro areas with high prices consume more or fewer services?  The report surveyed 112 Metro areas, including Minneapolis/St. Paul, to establish a nationwide median and detail both price and usage changes for each individual Metro area studied.  The findings reveal that Metro areas with lower price levels tended to have higher utilization of services and those with higher price increases tended to have lower utilization.  As healthcare costs rise, the rate people can take advantage of care goes down.


The Minneapolis/St. Paul specific price changes reveal that healthcare prices increased on average 15 percent between 2012 and 2016 while utilization decreased by 23 percent.  Minnesotans are paying slightly more than other patients for care, and it looks like they’re visiting various providers much less often.  It’s not just hospital beds that emptier.


The HCCI report also differentiates between inpatient, outpatient, and professional (clinician) care settings.  When looking at numbers specific to inpatient healthcare, Metro prices increased 17 percent yet usage decreased 50 percent over the period studied. Prices for outpatient services increased 18 percent while usage decreased by 19 percent and prices for professional services increased by 12 percent as usage decreased by 10 percent.


The HCCI report reinforces findings from MNA and NNU’s recent, “Minnesota’s Most and Least Expensive Hospitals” paper.  HCCI’s research supports the finding that in Minnesota, spending on inpatient hospital care is increasing faster than other types of healthcare spending.  While healthcare prices in Minnesota are increasing faster than inflation, inpatient services in the Minneapolis/St. Paul metropolitan area are increasing the most within the state.


HCCI’s work reveals that in addition to the potential of paying different prices at hospitals in the same city (as laid out in the MNA report), there is an extreme level of price variation across the nation. In nearly all of the 112 Metro areas included in this study, prices increased between 2012 and 2016. While the price variations in each Metro area were different, the common factor is that nearly all experienced rapidly rising healthcare costs.


Local and national price variations are contributing to rising healthcare spending and rising inaccessibility of care. If this trend continues, how much further will we see utilization statistics decline?  How many people will be priced out of seeking the care they need?  Let’s hold our healthcare system accountable for putting patients over profits and providing affordable, accessible healthcare for all.


View the HCCI Report here: