Quick Q&A: Katie Martin, M.P.A., on why prices drive employer healthcare costs

The Health Care Cost Institute (HCCI) has released its latest healthcare cost and utilization report, and the institute's president and CEO, Katie Martin, says its central message is one HCCI has been delivering for 15 years.

Because this year marks HCCI's 15th anniversary, Martin went back to the institute's very first healthcare cost and utilization report. Its top line, she said, was that prices, not utilization, were causing healthcare costs to rise. Martin likens the persistence of that finding to an old expression. "The more things change, the more they stay the same," she said. Prices may be going up in different ways than they used to, but it is still prices that drive spending,l she said.

In the commercial market, prices for healthcare services are negotiated, which sets it apart from Medicare and Medicaid, Martin said, and that arrangement is unique to the United States. When prices are negotiated that way, Martin said, the negotiated prices appear to drive costs and spending.

Martin does not present the finding as a surprise. What matters, she said, is the persistence of the conclusion. The fact that prices are still the story after 15 years suggests the country has not yet been able to tackle the problem, she said.

For health plans, employers and other purchasers of commercial coverage, Martin's look back at the first report underscores how durable that dynamic has been in the commercial market.