• John A Romley, Sarah Axeen, Darius N Lakdawalla, Michael E Chernew, Jay Bhattacharya, and Dana P Goldman.
• Schaeffer Center for Health Policy and Economics, Sol Price School of Public Policy, University of Southern California, Los Angeles, CA.
• Health Serv Res. 2015 Jun 1; 50 (3): 883-96.

ObjectiveTo explore the relationship between commercial health care prices and Medicare spending/utilization across U.S. regions.Data SourcesClaims from large employers and Medicare Parts A/B/D over 2007-2009.Study DesignWe compared prices paid by commercial health plans to Medicare spending and utilization, adjusted for beneficiary health and the cost of care, across 301 hospital referral regions.Principal FindingsA 10 percent lower commercial price (around the average level) is associated with 3.0 percent higher Medicare spending per member per year, and 4.3 percent more specialist visits (p < .01).ConclusionsCommercial health care prices are negatively associated with Medicare spending across regions. Providers may respond to low commercial prices by shifting service volume into Medicare. Further investigation is needed to establish causality.© Health Research and Educational Trust.

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