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Lane Koenig, PhD; Jonathan M. Siegel, MA; Allen Dobson, PhD; Keith Hearle, MBA; Silver Ho, MPP; Robin Rudowitz, MPA. American Journal of Managed Care 2003;9:SP34-SP41.
Focus: To identify and rank the key contributors to growth in healthcare costs for physician services.
Study Design: Multivariate regression analysis using state-level physician cost data from the state health expenditure accounts maintained by the Centers for Medicare & Medicaid Services (CMS) and a large national, private health insurer (LHIP).
Results: Between 1998 and 2001, the cost drivers for physician expenditures per capita for LHIP members were as follows:
- Demographics and economic conditions: 40%
- General price inflation: 16%
- Physician supply & hospital and other provider market structure: 22%
- Technology and treatment patterns: 11%
- Operating costs, health status, health care regulation, and provider payments: 11%
The eight fastest growing specialties (see chart below) accounted for 29 percent of the cost of physician services in 1999 and 43 percent of the growth in physician costs from 1999 to 2001. 
Full Study:
Drivers of Healthcare Costs Associated with Physician Services
(PDF format, 2.75MB)
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