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Minnesota clinics report sharp slowdown in medical spending growth

November 27, 2018

Health care spending at Minnesota clinics slowed sharply last year as physicians discouraged unnecessary procedures and steered patients to lower-cost sources for prescription drugs, lab tests and imaging scans but some providers did considerably better than others.

The total cost of primary care for privately insured patients increased only 2 percent from 2016 to 2017, at a time when some health care economists had predicted at least 5 percent growth.

The average privately-insured patient cost $563 per month, according to a report released Tuesday by Minnesota Community Measurement, a health care nonprofit. But that amount ranged widely based on where the patients received their primary care, according to the groups annual total cost of care report.

The cost ranged from $1,093 per month for patients at Mayo Clinic in Rochester to $398 per month for patients of the Community-University Health Care Center in Minneapolis.

Severity of patients illnesses or injuries shouldnt be an excuse, because clinics costs were weighted to even out those differences, said Julie Sonier, president of MN Community Measurement, which based its analysis on claims paid for care in 2017 by the states four largest private health insurers.

Theres still a band of the highest cost (provider) being about two-and-a-half times more than the lowest cost, she said. For individual consumers, who are increasingly faced with higher out of pocket costs, having that information that there is this vast difference in price by setting is important.

Doctors in Minnesota appeared to buck the prediction of higher costs by referring more patients to lower-cost clinics for specialty care rather than hospitals. Spending on outpatient hospital services declined 1 percent in 2017, after increasing 7.3 percent in 2016.

Imaging services alone proved to be 45 percent higher at outpatient hospital facilities compared to stand-alone imaging centers or clinics.

Spending on pharmaceuticals rose just 2 percent in 2017, compared to 11.7 percent three years earlier, the report showed. New drugs that cure hepatitis C fueled much of that increase in 2014, but increased competition has tempered those drug costs.

A key question in comparing clinics by cost is whether some are more expensive because they are more aggressive in ordering tests and procedures for patients, or because they simply charge higher prices.

In Minnesota, it appears that price has more influence on clinic costs, Sonier said, because providers in this state seem to do better than others at preventing unnecessary procedures.

Prices varied even for garden-variety medical procedures. The average cost of foot X-rays varied from $25 for patients at one clinic to $291 for patients at another, the report showed.

Despite the weighting to make clinics comparable, the total cost report tends to look worse for specialty providers such as Mayo as well as pediatric and rural clinics.

Mayos global patient population is undoubtedly different from that of the cheapest provider, Community-University, which provides primary care to a diverse, urban population.

Business leaders said the comparison information is nonetheless vital as health care costs increase and workers are asked to pay greater shares.

To truly improve health care for the people who write the checks for care across the state primarily employers and individual consumers we need reliable, accessible and comparable data, said Deb Krause, vice president of Minnesota Health Action Group, a nonprofit that addresses health care costs on behalf of large employers.

Jeremy Olson 612-673-7744

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