Measuring Prices in Health Care Markets Using Commercial Claims Data

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Abstract

Objective.

To compare methods of price measurement in health care markets.

Data Sources.

Truven Health Analytics MarketScan commercial claims.

Study Design.

We constructed medical prices indices using three approaches: (1) a “sentinel” service approach based on a single common service in a specific clinical domain, (2) a market basket approach, and (3) a spending decomposition approach. We constructed indices at the Metropolitan Statistical Area level and estimated correlations between and within them.

Principal Findings.

Price indices using a spending decomposition approach were strongly and positively correlated with indices constructed from broad market baskets of common services (r > 0.95). Prices of single common services exhibited weak to moderate correlations with each other and other measures.

Conclusions.

Market-level price measures that reflect broad sets of services are likely to rank markets similarly. Price indices relying on individual sentinel services may be more appropriate for examining specialty- or service-specific drivers of prices.

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