BROWSE CASE STUDIES Case Studies > Cost Driver Spot Analysis: Payment Variation by Payer

Cost Driver Spot Analysis: Payment Variation by Payer

February 2016


Consumers, Researchers, Medicaid, Health Reform


Cost, Health, Commercial, Medicare


Cari Frank

This report discusses significant variation in payments for hip and knee replacements between private health insurance payers and Medicare in Colorado. Coloradans with private insurance in the northeast pay $55,000 more than their neighbors with Medicare while those in Denver pay $17,000 over Medicare prices.

Recent national studies have revealed little to no correlation between Medicare and commercial payer health care spending in the same region. In particular, areas like Grand Junction, Colorado, historically praised for its low cost to treat Medicare recipients, have come under recent scrutiny for higher than average commercial health care costs relative to other areas in the state and nation.