Study: SE Wisconsin hospital payments have grown at half the national average

By Matt Masterson - Freeman Staff

July 25, 2014

MILWAUKEE - Residents of southeastern Wisconsin have seen their hospital commercial payment levels grow at approximately half the rate of the national level, according to a study released Wednesday.

The Greater Milwaukee Business Foundation on Health, Inc.  - a private operating foundation - found that from 2003 to 2012, the amount paid in hospital visits by southeastern Wisconsin residents had grown by 37 percent, or 3.5 percent each year, compared to the national Hospital Component of Consumer Price Index, which grew by a total of 75 percent.

“Studies commissioned by the Foundation found southeast Wisconsin average commercial health care premium costs were initially substantially higher relative to other Midwest markets,” GMBFH Executive Director Ron Dix said in a release. “Over time this gap in average commercial premium costs between southeast Wisconsin and other Midwest markets has shrunk significantly.

“This study suggests that hospitals in our area continue to contribute to making southeast Wisconsin health care costs more competitive.”

The study, conducted by the consulting firm Milliman, looked at key factors which influenced the region’s commercial payer hospital payment levels. It found that no hospital in southeastern Wisconsin saw an aggregate increase greater than that of the Hospital CPI over the same nine-year period.

The study also found that the day-to-day operating costs of hospitals in this region have grown at a significantly lower rate than the rest of the nation, especially in more recent years. Local operating costs increased at a rate of two percent each year from 2003 to 2008, and at half that rate from 2009 to 2012. National averages, however - listed as the Hospital Producer Price Index and CMS Hospital Market Basket - grew at rates of 34 and 47 percent, respectively, over the period of the study.