While many focus on the cost of health insurance premiums, relatively little media attention is being given to the actual cost of health care itself. According to the latest data available from the Centers for Medicare and Medicaid Services, or CMS, the annual cost of health care in the U.S. (excluding insurance premiums) is $6,815 per person. Depending on where you live, though, the costs could be much higher.
CMS gathers data from all types of health care providers -- hospitals, physicians, nursing homes, and other providers. It also collects information regarding spending on medical products including prescription drugs, over-the-counter medicines, eyeglasses, and hearing aids, among others. Based on the agency's analysis, here are the seven states with the highest health care costs of all.
7. Rhode Island
The smallest state in the U.S. by geographical size doesn't have equally small health care costs. Rhode Island's per-capita health care spending of $8,309 is nearly 22% higher than for the nation as a whole.
6. New York
One of the nation's largest states in terms of population also spends large amounts on health care. New York residents spend $8,341 on health care per capita. This amount is a little more than 22% higher than the U.S. figure.
Delaware's state motto is "Liberty and Independence," but citizens of the state don't have as much liberty or independence from high medical costs as many of their fellow Americans. The state's $8,480 health care spending per capita ranks more than 24% higher than that of the entire U.S.
Maine is known for its lobsters, but its medical costs might have even bigger claws. Residents spend $8,521 per person on health care -- 25% higher than Americans as a whole.
Connecticut claims the third-highest median household income in the U.S. but also ranks No. 3 in the nation for health care spending. The state's $8,654 per-capita figure amounts to nearly 27% more than that of the entire country.
Alaska is near the top of the planet -- and near the top in health care spending for the nation. Alaskans spend around $9,128 per person on health care. That's almost 34% higher than the figure for the U.S.
Massachusetts ranks as the biggest spender when it comes to health care. The state's $9,278 per-capita figure is a whopping 36% higher than that of the entire country. While some might point to "RomneyCare" as the culprit, it's not. Massachusetts ranked near the top well before the legislation was enacted. We should also note that the District of Columbia, which isn't technically a state, comes in even higher with $10,349 per capita in health care spending.
Follow the money
Motley Fool readers know that we're always looking for the investing angle with any story. Is there one here? Let's follow the money to see if investors might be able to profit.
The biggest component of health care spending for all of these states by a wide margin is on hospital care. Here's how the states stack up against each other and the U.S. as a whole on hospital spending per capita.
Could publicly traded hospitals that have a heavy presence in these states be good investing choices? Scratch HCA Holdings (NYSE:HCA) off the list. The nation's largest hospital chain operates 162 hospitals, but only one of them is in any of the seven states on our list.
Community Health Systems (NYSE:CYH) counts 135 hospitals spread across 29 states in its fold. Like HCA, though, only one of Community's hospitals is located in a state among those with the highest medical costs.
Health Management Associates (UNKNOWN:HMA.DL) operates 71 hospitals in 15 states. None of them are in the states mentioned earlier. What about Tenet Healthcare (NYSE:THC)? Tenet has 49 hospitals -- with a grand total of zero in our list of states.
All of these hospital stocks have served investors quite well over the past year, though. Community Health, HMA, and Tenet have more than doubled, while HCA shares are up "only" 53%.
These impressive gains stem largely from the perceived impact of Obamacare. The expectation is that hospitals' financials will improve as more currently uninsured patients obtain health insurance.
Could these hospitals have done even better if they operated in the states on our list? Probably not. That's because five of the seven states with the highest medical costs also are in the top 10 list of states with the highest cost of living. More money might come in, but more money would also likely go out due to higher costs.
Statistics and the truth
All of this reminds me of a quote attributed to George Canning: "I can prove anything by statistics except the truth." These seven states do statistically have the highest per capita spending on health care. However, these numbers in isolation don't allow us to draw any firm conclusions about why the spending is higher.
If you live in Massachusetts, Alaska, or the other states, you're spending more on health care than many Americans. You're probably also spending more on plenty of other goods and services. On the other hand, there's a good chance you make more money also. When we follow the money, we need to follow all of the money.
Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.