By Marissa Evans, CQ Roll Call
April 27, 2016 -- Residents in many states face health care costs that are thousands of dollars more than those in other areas, even in cities just miles away, according to a joint report released by Health Affairs and the Health Care Cost Institute.
Alaska had the highest average health care prices, with residents paying twice the costs of the national average, according to the report issued Wednesday afternoon. Wisconsin, North Dakota, New Hampshire, and Minnesota made up the rest of the top five states with the highest health care costs.
Only 15 states had health costs below the national average. Florida, Arizona, Tennessee, Maryland, and Nevada had the lowest in the country.
The study used data from the Health Care Cost Institute to assess national commercial claims and compare 242 medical services prices across 41 states and the District of Columbia between Jan. 1, 2012 to Dec. 31, 2013. Prices were standardized to reflect costs in September 2015. The study also looked at city data. No state data was available for Alabama, Arkansas, Hawaii, Idaho, Montana, Michigan, South Dakota, Vermont, and Wyoming.
"The questions that remain for researchers, policy makers, and health care leaders are as follows: Why do prices for the same service differ markedly across distances of only a few miles, and what amount of that difference is justifiable?" the researchers wrote.
When trying to compare the prices among 242 services, researchers found a wide variation. Authors found that in Florida, 95 percent of the prices for 241 services were at or below the national average. But among 221 services in Minnesota, 45 percent of the prices were at least 50 percent more than the national average.
The study also found that some residents in different cities in the same state could see significant price differences. In other states, differences between cities were minimal.
Researchers used a combination of prices for knee replacements and pregnancy ultrasounds alongside Metropolitan Statistical Area data to evaluate differences within 12 states. Californians seeking knee replacements could face a $27,243 average difference depending on whether they lived in Sacramento or Riverside. However, Virginia residents needing the same surgery only saw a $6 average difference between nearby cities.
Pregnant women needing ultrasounds in California were also bound to see price disparities across nearby cities. The average price difference in California was as much as $477. Pregnant women in Ohio saw an average $339 difference depending on whether they got their ultrasound in Cleveland or Canton. But Virginia area women found just a $4 average difference.
Providers might compete for fancier machinery or more convenient clinic locations, but they are not as competitive when it comes to prices, said Jonathan Skinner, a health economist at The Dartmouth Institute for Health Policy and Clinical Practice who was not involved in the study.
"The unknown question is: Do the higher prices get you better quality?" Skinner said in an interview. "I think what little evidence I've seen is just because you're paying a lot doesn't necessarily mean you're getting better quality."