A tale of three cities: Hospital and health system costs in the Midwest

April 20, 2015

A Midwestern city at night with buildings lit up.

There is tremendous variation in health care spending by geographic region in the United States. To better understand this variation, CHRT analyzed health care markets, state-level regulation, and hospital cost variation in three Midwestern states, focusing on the largest city in each state: Detroit, Michigan; Indianapolis, Indiana; and Milwaukee, Wisconsin. These states were chosen for their diverse health care policies and market conditions. This brief describes trends in state-level health spending and factors that may contribute to the differences in spending among the three states.

Key findings include:

  • From 2001 to 2009, Michigan had the lowest overall health care cost per capita among the three Midwestern states in this analysis, while Wisconsin had the highest. Michigan also had the lowest average annual growth in spending per capita from 1991 to 2009, and Wisconsin had the highest. Many complex factors contributed to these differences, and likely included market conditions and regulations that varied by state.
  • In fiscal year 2013, Michigan had the lowest and Wisconsin had the highest per capita hospital spending among the three states in this analysis.
  • Market conditions and policies affecting the size of hospitals’ profit margins varied by state. See our report for details for Indiana, Michigan, and Wisconsin.
  • In fiscal year 2013, health system operating cost and total profit margins varied greatly in the three cities of the Midwestern states in this analysis. See our report for details for Detroit, Indianapolis, and Milwaukee.

Suggested citation: Dreyer, Theresa; Koss, Joseph; and Udow-Phillips, Marianne. A Tale of Three Cities: Hospital and Health System Costs in the Midwest. April 2015. Center for Healthcare Research & Transformation. Ann Arbor, MI.

Special thanks to Dean G. Smith, PhD, for guidance on the financial analysis.