Cost of Health Care Accelerated in 2018 for Minnesotans with Private Health Insurance

November 7, 2019

MN Community Measurement’s annual health care cost report highlights cost in Minnesota

Contact: Raya Zimmerman zimmerman@neuger.com 612-664-0716

MINNEAPOLIS – November 7, 2019 – MN Community Measurement (MNCM) has released its annual report on health care cost and utilization to better inform the public about Minnesota’s health care landscape. The report highlights health care cost trends and drivers of cost growth throughout the state of Minnesota and includes data that consumers, employers, and others can use to compare costs of different providers. 

In 2018, the total cost of care for commercially insured patients in Minnesota increased by 5.9 percent to $596 per patient per month. After slowing to 2.0 percent growth in 2017, cost growth in 2018 returned to previous levels driven by higher growth in professional services, hospital outpatient services, and prescription drug costs. 

There continues to be a large difference in the total cost of care across medical groups. Medical group costs ranged from $429 to $1,096 per patient per month, after accounting for patient complexity. Reasons for the difference across medical groups include prices and the amount and type of care provided, with price being a stronger factor. 

For the first time this year, MNCM was able to analyze variation in total cost of care by region of the state. The region is defined by where the patient lives, not where they received care. The total cost of care varies across regions from $505 to $797 per patient per month on a risk-adjusted basis. 

Julie Sonier, President of MNCM, said the organization’s goal in collecting and sharing this information is twofold. “First, we aim to shed light on health care cost variation and the factors driving overall cost. We want to draw public attention to these issues that affect health care affordability in Minnesota,” said Sonier. “Second, we share the information with the public to support more informed choices in our very complicated health care system.” 

In addition to the report, medical group level data on total cost of care and prices for individual services are published on MNCM’s consumer website, www.mnhealthscores.org.

Employers and consumers have a big stake in better understanding variation in health care costs and how data can be used to improve affordability. According to the Peterson-Kaiser Health System Tracker, total health spending on behalf of a family of four with health insurance from a large employer exceeded $22,000 in 2018. Of this amount, employers paid over $15,000 (66 percent), while families paid over $4,700 in premiums and an additional $3,000 for out-of-pocket costs. 

Bentley Graves, Director of Health Care and Transportation Policy for the Minnesota Chamber of Commerce, said MNCM continues to provide vital information about health care costs in Minnesota. 

“Employers and their employees know that health care costs are high and moving continually higher,” said Graves. “This report identifies where employers, consumers, policymakers, and other stakeholders need to focus their collective attention to tackle this trend: the price of services, the significant variations in costs, and the growing divergence between commercial and government reimbursements. Once again, MN Community Measurement has done its job in bringing this important data forward. Now it’s up to all of us to act on it.” 

The report includes data from an analysis of health care costs for Minnesotans who have private health insurance. The analysis in this report is based on claims data for 2018 from the four health plans with the largest commercially insured patient populations in Minnesota: Blue Cross Blue Shield of Minnesota, HealthPartners, Medica Health Plans, and PreferredOne. The analysis includes the actual costs of 1.6 million patients and total spending of more than $10 billion in calendar year 2018. 

Deb Krause, Vice President of the Minnesota Health Action Group, also commented on MNCM’s report. 

“Data transparency is a key component of a high-functioning health care marketplace,” said Krause. “But ongoing collaboration by health plans and other health care stakeholders is needed to make that data actionable so together, we can begin to influence the cost of care for those who write the checks for care across the state.” 

To view the report, click here: https://mncm.org/wp-content/uploads/2020/01/2019-cost-and-utilization-chartbook.pdf. MN Community Measurement is an independent nonprofit dedicated to empowering health care decision makers with meaningful data to drive improvement. MNCM works with doctors, hospitals, clinics, insurance companies, employers, and state agencies to collect, analyze, and share health care data to drive ongoing improvements in quality and cost. Learn more at www.mncm.org

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