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Little Rock, Fayetteville Metro Area Residents Pay Less for Medical Services than Residents of Other Metro Areas

September 23, 2020

money

Author

Elizabeth (Izzy) Montgomery, MPA
Policy Analyst
501-526-2244
efmontgomery@achi.net

 

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Residents of the Little Rock and Fayetteville metropolitan areas pay less, on average, for medical services than residents of most other metro areas around the country, according to a new report from the Health Care Cost Institute (HCCI).

On Friday, Sept. 18, HCCI released its annual Healthy Marketplace Index, a report that assesses spending, price, utilization, and competition among healthcare providers across 124 metropolitan areas. This year’s report utilizes approximately 2.5 billion commercial claims between the years 2013 to 2017 to track each of these indicators. The report shows that spending and other indicators vary widely by metropolitan area, and there is significant variation within metro areas when evaluating distinct service categories such as inpatient, outpatient, and physician services.

The report’s price index compares prices paid for the same services across the metropolitan areas. Overall, the majority of metropolitan areas fell within 10% of the national median on price, with some higher-price outliers on the West Coast. Notably, the Little Rock metropolitan area had the lowest overall price level in the country.

Two Arkansas metropolitan areas are included in the Healthy Marketplace Index report: the Fayetteville-Springdale-Rogers metro area and the Little Rock-North Little Rock-Conway metro area.

In the Fayetteville metro area:

  • Overall per-person spending was 27% below the national median in 2017, increasing by 18% between 2013 and 2017.
  • Overall spending resulted from prices that were 11% below the national median in 2017, use that was 6% below the national median, and a mix of services (low-cost vs. high-cost) that was 11% less costly than the national median.
  • The hospital market in Fayetteville in 2017 was only moderately concentrated, with a ranking of 107 out of 124 (with the No. 1-ranked metropolitan area having the most market concentration and the 124th having the least); major destinations for patients seeking care outside of the Fayetteville metro area include Joplin, Mo.; Springfield, Mo.; and Little Rock.

In the Little Rock metro area:

  • Overall per-person spending was 29% below the national median in 2017, increasing by 12% between 2013 and 2017.
  • Overall spending resulted from prices that were 26% below the national median in 2017 (the lowest of all metropolitan areas gauged), use that was 10% more than the national median, and a mix of services that was 11% less costly than the national median.
  • The hospital market in Little Rock in 2017 was highly concentrated, with a ranking of 48th out of 124.

The full Healthy Marketplace Index report, including an interactive dashboard and a metropolitan area snapshot, is available on the HCCI website.

ACHI has also examined price variation issues, utilizing data from the Arkansas All-Payer Claims Database, a part of the Arkansas Healthcare Transparency Initiative. Examples include an analysis of EpiPen cost trends from 2013―2015 for commercial insurance versus Arkansas Medicaid, and an analysis of insulin prices in Arkansas that found a 54% increase between 2013 and 2018.