NEWS
State healthcare prices run rampant
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by Carolyn Smith
Thursday, September 15, 2005
Wisconsin consumers and businesses pay a significantly higher amount for health care than most other states in the nation, according to a study by the U.S. Government Accountability Office Wednesday.
The study, which was requested by U.S. Rep. Paul Ryan, R-Wis., and Milwaukee Mayor Tom Barrett, compared health care costs of metropolitan areas across the nation.
Ryan said he and Barrett asked for the analysis "in response to a study that said that we paid much higher health-care prices than the rest of the country."
The research effort was also conducted to determine the cause of the health-care cost discrepancy, Ryan added.
The study looked at hospital prices, physician prices and health-care spending per person in more than 200 major cities nationwide using medical claims data from 2001.
"The results are really pretty staggering," Ryan said in an interview with The Badger Herald. "It shows how much higher our health-care prices are, especially physician prices."
According to the results, the Milwaukee-Waukesha area ranked fifth in the nation among 232 regions for the highest hospital costs. Its costs towered 57 percent above the national average.
In addition, eight Wisconsin metropolitan areas were listed in the top 10 areas that pay the most for physician care, out of 319 cities. La Crosse, Wausau, Eau Claire and Madison were the top four cities, respectively, in the nation.
"The GAO claims the cause of this is lack of competition in our health-care systems and the amount of consolidation we have in our health-care providers," Ryan said. "Also, consumers and health-care purchasers lack bargaining clout and negotiation power to hold down prices."
Ryan said though Congress is looking into the problem of inflated health-care costs, it is a difficult process.
"There's no one magic-bullet answer to address this," Ryan said. "One of the first things we need is more transparency in the price and quality of health care."
If consumers are more informed about the cost and quality of their health care, they can pressure providers to lower prices, Ryan said.
However, Ryan said there have been some steps taken to initiate this kind of a remedy.
"There are some initiatives in the new Medicare law that will do that," Ryan said. "But we need to do more in the state and federal government to get transparency in health care and get data on the price and quality [of health care] to consumers."
Ryan also said more should be done to help individuals who buy their own health care and small businesses that provide insurance for their employees to gain access to purchasing pools. A bill that permits pooling was passed in the U.S. House of Representatives in July and is waiting approval in the Senate.
Paul Vornholt, a spokesman for Barrett, also expressed concern about the effect health-care costs are having on Milwaukee businesses.
"We want to encourage businesses to see how it impacts them so we can start acting on this to bring costs down," Vornholt said.
Health-care costs have a direct effect on an area's economy as well, Vornholt added.
