Counting Change

Measuring Health Care Prices, Costs, and Spending

Health care spending comprises nearly 18 percent of the U.S. gross domestic product. While there is no shortage of data on health care spending at the national and health plan levels, the public and purchasers of health care do not have pricing information that allows them to meaningfully compare cost of services by different providers.

Various stakeholders have different goals and need different kinds of information:

  • Purchasers of care—health plans and employers—need information on cost for the purpose of negotiation.
  • Policy-makers need community-level information on cost and spending for accountability purposes.
  • Consumers are interested in pricing information for discrete services. For the insured, however, out-of-pocket co-pays mask true prices.

Significant work is currently being done to improve price, cost, and spending measurements, including:

  • Robert Wood Johnson Foundation's Aligning Forces for Quality national program to improve quality and value of health care in 16 communities.
  • State of Massachusetts data collection, analysis, and public reporting initiative.
  • Federal Affordable Care Act mandates to measure costs.

Measurement enables value, giving people information to make decisions and move health care toward the ultimate goal—a transformed health care system with high quality care delivered at a lower overall cost.