Healthcare costs differ from one region to the next. This year’s Milliman Medical Index (MMI) once again illustrates this variation by examining 14 cities. Miami is the most expensive city studied, at $24,965, while Phoenix is the least expensive, at $18,365.
Miami has been the most expensive city for several years, which caught the eye of the Miami Herald. Here is an excerpt:
The Miami area continues to have the highest healthcare costs in the country, according to the latest edition of the Milliman Medical Index…
The number include employer and employee costs, including some out-of-pocket deductibles and co-pays.
For years, the Miami region has ranked at or near the top of costs for Medicare, with seniors here often costing twice as much a year as those in places like Salt Lake City or Minneapolis-St. Paul, according to studies by Dartmouth doctors…
Dartmouth has long attributed the high costs in Miami to the area’s large numbers of specialists and an over-supply of hospital beds.
How do these costs vary across the 14 cities analyzed in the MMI? Here is an illustration:
Last year, Miami was the first city analyzed in the Milliman Medical Index to surpass $20,000 in medical costs for the typical family. This year, New York and Chicago join the club. Here is the full breakdown:
Here’s a closer look at the city-by-city list:
Paul Krugman weighed in over the weekend on the Cadillac tax:
Should there be a limit to the tax deductibility of employer-provided health insurance, which is what the excise tax in the Senate bill is supposed to fix? My answer is yes, but the final bill should address the criticisms….The counter-arguments seem to run along three lines. First, there’s the argument that many “Cadillac” plans aren’t really luxurious — they reflect genuinely high costs. That’s surely true. A flat dollar limit to tax deductibility has real problems. At the very least, the limit should reflect the same factors insurers will be allowed to take into account in setting premiums: age and region.
What effect do age and location potentially have? Bob Dobson’s paper, “No Room to Stand,” looks at how South Florida is susceptible to the Cadillac tax.
In 2009, the cost of healthcare for a typical family of four in Miami covered by an employer-sponsored PPO is $20,282. The cost of care for a similar family in Phoenix is less than $15,000. While these numbers include employee cost-sharing (copays, deductibles, and other coinsurance are reflected in the MMI totals but are not subject to the excise tax), they still show how much more susceptible certain areas of the country are to hitting a fixed-dollar excise tax threshold such as $21,000. Given that medical costs have trended upward at a rate of between 7% and 10% over the last five years, one is left to wonder if the average Miami family will find its benefits exceeding the tax-triggering ceiling by the time the tax provision is imposed in 2013.
We have blogged about this before. You can read the Dobson report here.
We’ve blogged before about the healthcare costs in Miami. An article in today’s Miami Herald looks at the possiblity that many health plans in South Florida may trigger the proposed tax on “Cadillac” benefits if such a tax is included in reform proposals. Excerpting from the article:
Santiago Leon, a Miami insurance broker, says that in South Florida “we have on the market today a surprising number of plans that would hit the `Cadillac’ ceiling.”
About a third of the 11,000 employees of Baptist Health South Florida have a plan valued at more than $17,000 a year. Considering that health costs are rising far faster than inflation, it’s possible those figures could be above the threshold of $21,000 in 2013, when the provision would be scheduled to take effect.
Meanwhile, Milliman, a national consulting firm, released a study earlier this year that an average employer-based, preferred provider organization plan for a family of four in the Miami area cost $20,282 in 2008.
Cost, Milliman Medical Index
Did you know Miami-Dade County has two Gamma Knives, and will host a proton beam by 2012?
So reports an article just out from Forbes. The article looks both at the cost of care in Miami as well as some of the drivers. Quoting from the article:
Though Miami-Dade’s share of residents 65 and older accounts for 14% of the population, that doesn’t explain why it topped the institute’s list. An annual report by the actuarial and consulting firm Milliman found that Miami had the highest level of private sector medical spending among 14 major metro areas studied. According to the firm’s analysis, it costs $20,282 for a family of four covered by an employer-sponsored preferred provider organization (PPO) compared to a national average of $16,771.
Just yesterday we mentioned efforts to counter Florida’s healthcare costs with a new doctor model, one of several attempts to address some of the highest-cost care in the country.
For the national view on cost disparity, check out this new tool from the New York Times.
Cost, Milliman Medical Index
The U.S. Department of Health and Human Services (HHS) has issued a series of state-by-state reports on health reform. Check out your state.
Uwe Reinhardt is part of a discussion of healthcare costs at the National Journal that’s populated by heavy hitters. Here’s an excerpt from Prof. Reinhardt:
A message President Obama should hammer home crisply – and I mean crisply – to the American middle class is that the sun may be shining today on them, but that it is sailing into a perfect storm.
According to the Milliman Medical Index, total health spending (employer-paid premium, employee-paid premium and out-of-pocket spending) for a typical non-elderly American family of four is now $16,700. It has been growing at an average annual compound rate of about 8.5% since 2000. At a rate of only 8%, total health spending for that family will rise to over $36,000. Yet the gross wage base that should, ideally, support all of a family’s spending (even the part “paid” by employers but ultimately taken out of the employee’s take-home pay) has been growing only at 3% or so in the past decade and is not rising at only 1.8%.
Do the math! If health reform fails and the status quo continues unabated, health care will chew up the budgets of American middle class families like PacMan, and millions more middle class families will be tossed into the pool of uninsured. That’s what is in the status quo for the American middle class.
Instead of lengthy discourses fit for publication in Health Affairs, President Obama could get this message across with one simple flip chart. Perhaps then the American middle class would appreciate more what benefits their families may derive – perhaps not today, but over the next decade – from a program of systematic cost containment and federal subsidies for lower-income Americans.
Finally, we’ve talked about the cost of care in Florida before. Here’s one attempt to reverse that trend.
Here’s another potential dimension to the disparity in healthcare costs from one city to another: Over the weekend, the Miami Herald used the Milliman Medical Index to help quantify the potential impact of proposed taxes on healthcare benefits. The situation is complicated by the high cost of care in Miami, as Miami is the first city in the history of our study to exceed $20,000 in health costs for the typical family of four. For more, read the article.
Milliman Medical Index, Reform
The disparity in health costs across different metropolitan areas continues to attract attention. Time ran an article today about the high cost of healthcare in Miami. The article cites data from the Milliman Medical Index:
Hurricanes and housing busts have already battered South Florida’s image as an earthly paradise. But Miami’s reputation for dysfunction is on display again this spring as the Obama Administration shifts health-care reform into high gear — and a spate of studies slams the Magic City as the poster child for exorbitant medical costs. This week, the Milliman Medical Cost Index listed the 2008 average private provider costs for a Miami family of four —$20,282 — as the highest among the 14 major U.S. cities it studied, adding that more than 40% of that amount came out of Miamians’ own pockets.
Click here to read the full article.
Cost, Milliman Medical Index