Study finds N.H. health costs some of the highest in U.S.

  • In this photo taken Saturday, Nov. 22, 2014 a customer reads information in Spanish about Blue Cross Blue Shield and Obama Care at a kiosk at Compare Foods in Winston-Salem, N.C. Such atypical approaches to selling health insurance policies are playing out across the country since the second round of open enrollment under the federal Affordable Care Act opened in mid-November. Insurance companies and some states are focusing heavily on signing up eligible Hispanics, a group that accounts for a large share of the nation's uninsured but largely avoided applying for coverage during the first full year the health care reform law was in effect. Hispanics accounted for just 11 percent of those who enrolled in the private policies sold during the initial sign-up period, which ended in March. (AP Photo/Gerry Broome)

Monitor staff
Published: 4/30/2016 11:49:30 PM

New Hampshire has some of the highest health care costs in the nation, according to a recent study released by the D.C.-based organization Health Care Cost Institute.

Using data from insurance claims across the country for insurance companies including Humana, Aetna and United HealthCare, the institute compared each state’s health care costs to the national average. They found New Hampshire’s health costs were the fourth-highest, behind Alaska, Wisconsin and North Dakota.

“Clearly in New Hampshire, the unfortunate story is that 95 percent of the prices are at or above the national average,” said David Newman, the institute’s executive director.

Health care costs were lowest in states including Arizona, Florida, Maryland and Tennessee.

However, the New Hampshire data analyzed for the study didn’t include insurance companies that make up the vast majority of the state’s insurance market, including Anthem, Harvard Pilgrim and Cigna.

Those three carriers make up about 80 percent of the market, while the carriers surveyed by the Health Care Cost Institute make up about 20 percent, according to New Hampshire Insurance Department Health Policy Analyst Tyler Brannen.

The fact these insurance carriers are smaller players in the New Hampshire market can also affect their costs, Brannen said.

Whereas the bigger carriers have more price negotiating power with New Hampshire hospitals, “Aetna and United, they end up paying more to New Hampshire hospitals.”

However, Brannen said the Health Care Cost Institute shouldn’t be discounted and said he think the results show that New England is an expensive area for health care.

“It probably tells us, yes, the prices in New Hampshire and New England might be higher than the rest of the country,” he said.

Newman said his study showed that neighboring New England states are also pricey and that New Hampshire is by no means an outlier.

“We’re high costs, it’s mostly because we’re in a high cost region,” said Steve Norton, executive director of New Hampshire Center for Public Policy Studies.

There are a few things that could be driving this, Brannen, Newman and Norton said.

For instance, New England has higher quality health care than other parts of the country, but with good quality comes more money. The region is also an aging one, potentially meaning more people need to utilize health care services.

Norton’s organization released a study four years ago on health care spending in the state, finding a number of factors play into health care costs, including the large role hospitals have in the state and the use of expensive technology to do imaging and help doctors perform medical procedures.

The New Hampshire Public Policy study also found that the cost of employee pay and benefits at New Hampshire hospitals went up significantly from 2000 to 2010 – the average salary rose 60 percent from $50,000 per year to $80,000 per year in wages and benefits.

New Hampshire’s hospital industry saw rapid growth in the 1990s and early 2000s, which has since tapered off, Norton said.

Newman said that in a largely rural state, some hospitals and clinics may simply have to pay higher salaries to attract and retain good doctors and other health professionals.

Newman said that while his national study didn’t take a look at the reasons behind high health costs, consolidation at New Hampshire hospitals may play a contributing role. Consolidation and a lack of competition among hospitals means there’s less of an incentive to keep prices low.

He hopes his study can show policy makers some of the health care costs in the state so they can make informed decisions about costs.

“The state and (local) governments more generally are big purchasers of healthcare,” Newman said. “They’re buying health care of state employees or teachers, they have a significant interest as a purchaser for what’s driving costs in the state.”

(Ella Nilsen can be reached at 369-3322, or on Twitter @ella_nilsen.)


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