Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald


Health costs differ throughout state

Health care
costs are 26 percent higher for residents of Eau Claire than
residents of Madison, according to a study released Tuesday by a
grassroots public interest organization.

Action of Wisconsin studied the costs in different regions of
Wisconsin of the same health plan provided by the state to its
employees. Some residents are paying nearly $4,000 more per year for
the exact same family insurance plan.

"It really
points to a very dysfunctional health care market when the cost
variation is that great for the same health insurance benefits,"
said Robert Kraig, program director for Citizen Action and author of
the report. "A functioning market should bring more efficiency and
higher quality services at lower costs, but it's actually the other
way around right now in health care."


The study was
modeled off a similar one conducted nationally by the federal
Government Accountability Office, which looked at health care costs
for federal employees in different regions of the country.

The study
just released in Wisconsin examined 22 different private insurance
plans in the state. These companies competitively bid for the state
contracts to insure state employees.

The northwest
region of the state was found to have the highest rates, while the
south central region had the lowest. Kraig pointed to hospital
competition for better services — not lower prices — as one
reason for higher costs in some areas.

"Right now
a lot of the hospital decisions are based on 'we want to compete
with the other hospital chain across town and we want to have the
same high-tech heart surgery center they have, even if we have enough
capacity in the city,' so the result is high costs," Kraig said.
"In a system that is better thought out or is more competitive, you
don't build an extra high-tech unit in a hospital unless there's
a need."

insurance companies negotiate rates of services with hospitals and
clinics, these companies can determine how much customers have to
pay, Kraig said. In areas where one hospital chain is dominant, they
can set high prices. Customers must pay more for services because
they have no other hospital to go to.

Commissioner of Insurance Sean Dilweg said the Madison area differs
from many others in the state.

"It is
important to note that the Dane County region is a very unique
market, with providers owning all of the health insurers in that
region and state employees making up a very large mix of the
consumers," Dilweg said in an e-mail to The Badger Herald.

Dilweg said
he does not agree with some of the conclusions made by the study.

"The study
reflects increasing health care costs that may not be attributable to
insurers," Dilweg said. "The study's differences may reflect
the growing consolidation of the providers that we have seen
prevalent in southeastern Wisconsin, or increasing costs of physician
salaries and medical equipment," Dilweg said in the e-mail.

Even if these
are the reasons for high health care costs, Kraig still thinks
something should be done.

had almost a doubling of health insurance costs in the decade alone,
and it's going to double again in the next 10 years unless we have
fundamental reform," Kraig said. "We hope these disparities show
how out of whack the health care market is and how much we need the
state Legislature and Congress to enact real health care reform."

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