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Health care costs to be dissected by new nonprofit

Elif Geris

Health care cost inflation is being investigated

The answer to the big question is examined per health care claim

Why are health care costs on a steep rise?

Costs of this commodity are shooting up, and the number of employers sponsoring their workers is swiftly reducing. This is contrary to 2010’s 3.3 percent increase in sponsorship plans for employees. The sharp decline followed a sharp inflation in drug prices and hospital fees. Insurers such as UnitedHealth Group Inc., Aetna Inc. and Humana reported the past growth in employer spending on health care benefits.

2010 marked the third consecutive year in the decline for employee plan sponsorship while prescription drug prices rose by three percent and inpatient health care costs rose 5.1 percent.

The rises in health care costs are raising questions in the minds of many. Martin Gaynor, a Carnegie Mellon University economist said, “There’s been an awful lot of consolidation in certain sectors of the health-care industry, and we know that tends to lead to higher prices, but we can’t draw any conclusions yet.”

According to federal government statistics, U.S. medical spending has risen to $2.6 million throughout the last year, twice the amount as ever before.

However, Gaynor said, “We see utilization falling moderately and the spending is still going up.”  Gaynor added that the increase in spending was due to the inflation in drugs and hospital fees.

According to the Washington Post, a new nonprofit called the Health Care Cost Institute will dissect 5 billion health insurance claims on their database while maintaining individual privacy.

Such data will be used to address the question of how health care costs have risen so high. Aetna Inc., Humana, UnitedHealth Group Inc. and another insurer named Kaiser Permanente will provide HCCI with the data necessary to answer the health care question.

33 million individual cases are being studied by HCCI and Gaynor claimed, “It’s the first time that this data has ever been assembled like this,” adding that HCCI’s data people ”have been working like crazy to make this happen.”

The database has been a work in progress for the past two years, and Gaynor claimed, “At various junctures, it would look like this wasn’t going happen.” [sic].

Researchers at Northwestern University participate in the effort to answer the question. They consider the possibility that recession could be accounted for a hopeful decline in health care costs.


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