Variation in Health Care Cost Growth

The researchers investigated the factors related to variation in cost growth in the Medicare and commercial sectors. Specifically, the researchers determined: (1) whether the factors related to the rate of growth in the Medicare program are the same factors that are related to level of cost; (2) whether the factors associated with cost growth in commercial markets are the same as those related to Medicare cost growth; and (3) the extent to which cost growth varies between employers and health plans and what factors are related to that variation in cost growth. While most research and policy initiatives are aimed at managing the level of costs as opposed to cost growth, the researchers suggested that additional attention must be devoted to understanding and developing initiatives relating to the trajectory of cost growth, since the factors related to high levels of costs may not be the same as factors related to cost growth. The objective of this study was to provide knowledge that will support development of cost containment approaches that address cost growth.