The cost of health care in Milwaukee, which was significantly higher than other similar cities a few years ago, is falling in line with the rest of the Midwest, according to a new report.
Health care costs in the Milwaukee area were 5 percent above the Midwest average from 2007-09, according to a 12-city analysis in the latest report by HCTrends, which is sponsored by Pewaukee-based The Benefit Services Group Inc.
Health care costs in the Milwaukee area became more competitive with other Midwest cities from 2007-09, according to HCTrends. Milwaukee health care costs were 10 percent above the Midwest average in 2007, the report said.
In the Milwaukee area, per member per month health care costs for physician services was 17 percent above the Midwest average in 2007, but dropped to 2 percent above the Midwest average in 2009. Per member per month inpatient costs in the Milwaukee area fell from 16 percent above the Midwest average to 7 percent above the Midwest average in 2009, according to the report.
“Some of this narrowing may be due to the continued integration of physician groups and hospital systems, which has accelerated significantly in the Milwaukee area since 2007,” the HCTrends report said. “Integration can result in better coordination of care, which lowers costs by ensuring that health care is delivered at the most appropriate time and in the most appropriate setting.
“Another cause could be the Milwaukee market’s continued shift to fixed-pricing contracts, which give providers more financial incentives to ensure the appropriate utilization of health care services than discounted, fee-for-service arrangements.”
In a separate report, HCTrends said that in a survey of Milwaukee-area employers, many say health care reform is “significantly increasing their health plan costs, including a sizeable number of smaller employers that already predict they will drop their health plan when individual coverage becomes available through the state exchange in 2014.”
The average 2011 health plan renewal rate for all employers surveyed in the Milwaukee area was 8-10 percent, according to HCTrends.
