Related Experiment Video
Updated: Apr 20, 2026
Inverse Probability of Treatment Weighting Propensity Score using the Military Health System Data Repository and National Death Index
Published on: January 8, 2020
The Relationship between Commercial Health Care Prices and Medicare Spending and Utilization
John A Romley1, Sarah Axeen1, Darius N Lakdawalla2
1Schaeffer Center for Health Policy and Economics, Sol Price School of Public Policy, University of Southern California, Los Angeles, CA.
Objective:
To explore the relationship between commercial health care prices and Medicare spending/utilization across U.S. regions.
Data Sources:
Claims from large employers and Medicare Parts A/B/D over 2007-2009.
Study Design:
We compared prices paid by commercial health plans to Medicare spending and utilization, adjusted for beneficiary health and the cost of care, across 301 hospital referral regions.
Principal Findings:
A 10 percent lower commercial price (around the average level) is associated with 3.0 percent higher Medicare spending per member per year, and 4.3 percent more specialist visits (p < .01).
Conclusions:
Commercial health care prices are negatively associated with Medicare spending across regions. Providers may respond to low commercial prices by shifting service volume into Medicare. Further investigation is needed to establish causality.
Related Concept Videos
01:29Issues And Trends In Healthcare Delivery System
Cost Containment
Payment for healthcare services has historically promoted adoption of costly and often unnecessary or inefficient...
01:30Health Information Technology and Healthcare Information System
Health Information Technology, commonly called HIT, integrates advanced information systems and technology in healthcare settings. Its primary functions include:
01:26Methods Of Healthcare Delivery System
Managed Care System:
The managed care system is designed to control the cost while maintaining the quality of care. The patient's care from admission to discharge is planned by the primary care provider or the case manager, also known as the gatekeeper. In a managed care system, the number of care providers is...
01:29Documentation in Long-Term and Home Healthcare Setting
Long-Term Care Facilities
01:15Methods of Documentation VI: Case Management Model
For example, a patient with a chronic...
01:22Healthcare Associated Infections II: Preventive Measures
The best practices for preventing healthcare-associated infections include hand hygiene, patient risk...