Geographic Variation and Health Care Cost Growth

Research to Inform a Complex Diagnosis

As policymakers consider various measures to contain health care costs, a group of experts recently gathered to share insights on what drives increases in expenses. The meeting was convened by AcademyHealth and sponsored by the Robert Wood Johnson Foundation’s Changes in Health Care Financing and Organization (HCFO) initiative. Moderated by Robert Berenson, M.D., Institute Fellow at the Urban Institute, researchers discussed HCFO-supported research on cost containment. Experts presenting research included:

  • Michael Chernew, Ph.D., Professor, Harvard Medical School
  • Anne B. Royalty, Ph.D., Associate Professor, Indiana University-Purdue University Indianapolis
  • Richard Kronick, Ph.D., Professor, University of California, San Diego
  • Jack Hadley, Ph.D., Professor, George Mason University
  • Mythreyi Bhargavan, Ph.D., Director of Research, American College of Radiology
  • Vincent Mor, Ph.D., Professor, Brown University School of Medicine

The HCFO research examines the underlying factors contributing to rising health care costs and suggests that there are numerous policy tools that have the potential to significantly control spending, including:

  • Laws that require health care providers to seek approval before adding new facilities, technology, or services;
  • Policies that provide payers with increased bargaining power for technologies and services;
  • Price adjustments that ensure that physician services and technology are priced so that they accurately reflect the cost;
  • Review of health care utilization to ensure beneficiaries receive approval for select procedures prior to receiving the procedure; and
  • Insurance policies designed so that beneficiaries pay lower or no cost-sharing for high value services to encourage movement from low value services.

HCFO compiled a policy brief based on the new research presented at the meeting.

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