Chamber Studies Present Conflicting Views Of Local Health Care Costs

New figures show a widening gap between health care costs in Spokane and the rest of the nation.

Figures for the fourth quarter of 1997 show that Spokane’s overall living costs compared to other cities rose marginally, from 2.4 percent higher than the national average to 2.5 percent higher. Housing costs, a major component of the typical household budget, edged up a point and a half to 15.1 percent above the national average.

However, health care costs, which earlier had been pegged at 19.7 above the national average, shot up another 6 percent to a level where Spokane health care costs now exceed the national average by fully one-fourth.

These figures come from the American Chamber of Commerce Researchers Association.

Meantime, the Spokane Area Chamber of Commerce has put together a brochure touting this city’s lower than average health care costs. The brochure was at the printers and unobtainable before deadline, but it makes a case that health care costs less in Spokane than most cities.

How can this be?

Well, the American Chamber of Commerce Researchers Association and the Spokane Area Chamber of Commerce measure costs differently.

“There are many different statistical methods of measuring,” says David Buxton, director of Regional Information Services at Gonzaga University.

For example, following are figures on median household income in Spokane County from three different sources for roughly the same time period:

The Rand-McNally 1998 Commercial Atlas & Marketing Guide - $31,259 (1996).

U.S. Department of Housing and Urban Development - $39,900 (1996).

Washington Office of Financial Management - $35,837 (1997).

The difference between the highest and the lowest - $8,641 or a whopping 28 percent.

“Figures can make Spokane look very, very good or very, very bad,” says Buxton, “depending on the source.”

Buxton is the source of figures that the American Chamber researchers crank into their quarterly Cost of Living Index. He and hundreds of other researchers use a market basket approach of sampling living costs in cities across America.

Dan Hiebert, manager of managed care for Rockwood Clinic, heads a task force that came up with costs for the Spokane Area Chamber brochure. His group relied heavily on data developed by the Health Care Financing Administration. The federal agency, which funds Medicare, Medicaid and Child Health Insurance programs, uses a “geographic practice cost index” to determine how much to pay health care providers for services.

The index breaks out Seattle as a “geographic practice area.” It lumps Spokane into a catchall category labeled “The rest of Washington.” Even so, Hiebert says, his task force was able to “infer” from the data that the cost of providing health care in Spokane is lower than average.

Combining data from the index with anecdotal evidence and experience, Hiebert is confident that, “In Spokane, the cost of health care to business is below the national average, which is the thrust of our brochure.”

Initially, he said, the task force was rattled by the seemingly large disparity between the Spokane Area Chamber’s cost data and the figures issued by the American Chamber researchers. “But then we realized we were talking about different costs,” he said. “Costs can be measured and are relevant in different ways.

“There are costs to businesses,” said Hiebert, “which is what our brochure is about. There are costs to insurance companies. And there are costs to consumers.”

The Spokane Area Chamber’s new health care brochure is designed to help recruit new businesses of all types, retain referral business that historically has come to Spokane, and generate new referrals.

Insurance firm ordered to make refunds

The Washington Insurance Commissioner has ordered an Iowa insurance company to refund $2 million to nearly 8,000 group dental insurance customers statewide.

PFL Life Insurance Co. also was fined $15,000 for using unfiled and therefore unapproved rates.

The average refund is $258. That is believed to be a record refund paid directly to Washington consumers who were charged unapproved rates. Washington law requires all insurance carriers to file their contracts and rates with the insurance commissioner’s office for review.

PFL sold the coverage primarily to small businesses and self-employed persons.

Trade alliance picks new leader

Eric Seachris is the new executive director of the Spokane Regional International Trade Alliance.

A longtime resident of Spokane, Seachris has a broad background in international marketing and distribution. For the past eight years, he was president of an international consulting firm representing companies domestic and foreign.

The Spokane Regional International Trade Alliance is a nonprofit trade-development affiliate of the Spokane Area Chamber of Commerce.