Study finds Wisconsin has high healthcare prices

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A study released this month by the nonprofit Health Care Cost Institute found that Wisconsin has the second highest healthcare prices among the 41 states it surveyed. The study was based on claims data from UnitedHealthcare, Aetna, and Humana, which the Institute said represents 34% of total commercial claims in Wisconsin. The study found that prices in Wisconsin for over 200 common medical services were on average 81% higher than the national average, and that the price of 20% of these services are double the national average.

The study’s findings are generally in line with other recent national studies that have found that Milwaukee and Madison are among the costliest cities for health care, and that physician payments are 50% higher in Milwaukee than the Midwest average. The results are also in line with the reality that Wisconsin has some of the highest individual insurance premiums in the country. What’s more, Froedtert Hospital in Wauwatosa is raising its rates by 5% overall for the second year in a row, including 10% increases for inpatient intensive care and nursery hospitalizations.

On the other hand, the study’s findings seem at odds with other recent studies that show Wisconsin is making progress on controlling healthcare prices. For example, a 2015 study sponsored by the Greater Milwaukee Business Foundation on Health found that between 2003 and 2014, the increase in average southeast Wisconsin hospital commercial payment levels was less than 50% of the rate of increase in the national Hospital Component of the Consumer Price Index.

The Executive Director of the Health Care Cost Institute, David Newman, hopes that the study will prompt employers and individual consumers to ask why healthcare prices are higher in some places than others. However, as Guy Boulton of the Milwaukee Journal Sentinel points out, most patients do not pay attention to healthcare prices because many bills are paid by their employers and insurance companies – even though in the end these patients pay for the high prices in the form of lower wages.

This last point is especially important given that two-thirds of Americans would have difficulty coming up with $1,000 in an emergency to pay an unexpected bill. While some may say this illustrates the need for rich health plans with low out of pocket costs, the reality is that these types of plans eat up money that could otherwise be paid as wages, which makes it harder for employees to build savings.

To solve the problem of high healthcare prices, both employers and employees will need to change their behavior by educating themselves and making the choice to avoid high cost health plans and medical services in favor of more competitive options. Fortunately, professional healthcare consultants and online transparency tools are available to do just that.