Measuring Health Care Costs

As health care costs rise, policymakers and industry leaders are increasingly interested in developing accurate ways to measure and, ultimately, to try to reduce them for the individual patient as well as for society as a whole. RAND researchers have sought to measure the health care costs of state and federal health plans, hospice treatment, and certain health behaviors.

  • Report

    A Bitter Pill: Soaring Health Care Spending and the American Family

    Health care costs nearly doubled between 1999 and 2009, which left the average 2009 family with only $95 more per month than in 1999. If costs had matched the consumer price index's rise, the average family would have an additional $450 per month.

    May 23, 2014

  • Report

    Developing a Framework to Estimate the Cost of Opioid Dependence

    Understanding the costs of opioid dependence is important to inform drug policies and decision making. A targeted review of the harms of opioid dependence enabled an assessment of existing estimates of their costs and a proposed framework for developing new, more comprehensive estimates.

    Nov 5, 2013

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    Journal Article

    Reliability of Utilization Measures for Primary Care Physician Profiling

    While there has been interest in using utilization measures to profile physicians, examinations of these measures are rare. This study found only a small number of commonly used utilization measures reliably capture real differences in utilization among physicians.

    Jun 1, 2013

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    Journal Article

    Impact of Socioeconomic Adjustment on Physicians' Relative Cost of Care

    Ongoing efforts to profile physicians on their relative cost of care have been criticized because they do not account for differences in patients' socioeconomic status (SES).

    Apr 26, 2013

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    Do You Get What You Pay For? Maybe Not in Health Care

    While the current state of the evidence does not provide clear guidance to policymakers seeking to address the twin pillars of health care quality and cost, it is apparent that researchers must produce more detailed data on how to reduce health care spending while improving quality, writes Peter Hussey.

    Feb 12, 2013

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    25 Small Ideas for Saving Big Health Care Dollars

    Given the size of the annual “health care spend”—$2.7 trillion—summing up the savings associated with very minor cost-saving policy changes is likely to achieve significant aggregate savings, writes Jeffrey Wasserman.

    Jan 30, 2013

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    Journal Article

    Price Shopping in Consumer-Directed Health Plans

    Based on insurance claims for nine common outpatient services in consumer-directed health plans (CDHPs), researchers found no evidence that those with lower expected medical expenses engaged in more price shopping. Consumers did not engage in more price shopping before reaching the CDHP deductible, either.

    Jan 1, 2013

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    Journal Article

    Relationship Between Health Care Quality and Cost Remains Poorly Understood

    A review of more than 60 studies reveals extremely mixed findings on the association between health care quality and cost. Future work should determine what types of spending effectively improve quality and what types are wasteful.

    Jan 1, 2013

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    Journal Article

    Price Elasticity of Expenditure Across Health Care Services

    As policymakers worldwide debate ways to reform health care to reduce expenditures, estimates of price elasticity of expenditure are a key component for predicting expenditures under alternative policies. Here, data from Chile was used to estimate elasticity of expenditures across a variety of health care services.

    Dec 1, 2012

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    Journal Article

    Less-Experienced Physicians Spend More Money Caring for Patients Than More-Experienced Physicians

    Commercial health plans and Medicare are using cost profiles to identify which physicians account for more health care spending than others, while devising strategies to reward those who provide quality care at a lower cost. Doctors with less than 10 years of experience had 13.2 percent higher overall costs than those with 40 or more years of experience.

    Nov 1, 2012

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    Physicians Can Lead the Way in Reducing Health Care Waste

    Physicians are in an ideal position to identify and eliminate health care waste by categorizing all medical services into four distinct types.

    Jun 14, 2012

  • Research Brief

    Cost Reports Do Not Encourage Consumers to Choose Lower-Cost Providers

    Reports on the costs of individual providers designed to steer consumers toward lower-cost options may actually accomplish the opposite. Consumers have fixed co-payments and caps on their out-of-pocket spending that make most cost information impractical. Many also equate higher costs with higher quality of care.

    May 31, 2012

  • Report

    What is the Impact of Health Care Reform on Workers' Compensation Medical Care?

    When enacting, implementing, and evaluating health care reform, policymakers should consider potential spillover effects on workers' compensation insurance. The experience of Massachusetts's heath care reform suggests that reform may reduce medical costs.

    Apr 23, 2012

  • Journal Article

    Waste Represents At Least 20% of US Health Care Spending

    Cuts and restrictions in care are the common health care cost reduction methods, but cutting waste (including overtreatment, poor clinical and administrative coordination, and fraud) would save at least 20% of health care expenditures. Doing so will require significant cooperation across the health care professions.

    Apr 1, 2012

  • Journal Article

    How Do Consumers and Providers Respond To Public Cost Reports?

    Public reporting of health care costs is intended to motivate consumers to choose lower cost providers, and motivate providers to lower costs to retain market share. However, research suggests that consumer beliefs may end up working against the intended outcomes.

    Apr 1, 2012

  • Event

    The Affordable Care Act's Individual Mandate in Play

    RAND economist Christine Eibner spoke at a Bloomberg Government and RAND Corporation event in Washington, D.C. Eibner briefed the attendees on the results of her recent study, How Would Eliminating the Individual Mandate Affect Health Coverage and Premium Costs?

    Mar 20, 2012

  • Journal Article

    Ways to Improve Health Care Provider 'Report Cards'

    As health care reform expands the use of "report cards" to grade health care providers, greater attention to reporting methods may be needed to assure the quality of such efforts.

    Mar 1, 2012

  • Blog

    Do Physicians Need a 'Shopping Cart' for Health Care Services?

    Providing physicians with cost data in real time automatically as a part of the electronic medical record could make them better purchasers for their patients and provide better value, writes Robert H. Brook.

    Feb 22, 2012

  • Journal Article

    Do Physicians Need a "Shopping Cart" for Health Care Services?

    The technology of the ubiquitous electronic shopping cart could be adapted to help physicians understand the cost of the services they order for patients, and possibly change the mix and total costs of the products in the cart.

    Feb 1, 2012

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    Getting More Value from HIV Funding in the Developing World

    In the fight against HIV/AIDS, the countries with the highest burden of disease rely heavily on donor funding for their HIV programs. Funding from donors have flattened or even declined while demand for HIV/AIDS care continues to rise. A RAND study examined options to better leverage existing resources.

    Jan 15, 2012

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