Volume 50 | Number 3 | June 2015

Abstract List

John A. Romley Ph.D., Sarah Axeen B.A., Darius N. Lakdawalla Ph.D., Michael E. Chernew Ph.D., Jay Bhattacharya M.D., Ph.D., Dana P. Goldman Ph.D.


To explore the relationship between commercial health care prices and Medicare spending/utilization across U.S. regions.

Data Sources

Claims from large employers and Medicare Parts A/B/D over 2007–2009.

Study Design

We compared prices paid by commercial health plans to Medicare spending and utilization, adjusted for beneficiary health and the cost of care, across 301 hospital referral regions.

Principal Findings

A 10 percent lower commercial price (around the average level) is associated with 3.0 percent higher Medicare spending per member per year, and 4.3 percent more specialist visits ( < .01).


Commercial health care prices are negatively associated with Medicare spending across regions. Providers may respond to low commercial prices by shifting service volume into Medicare. Further investigation is needed to establish causality.