Study: Blame Medicare, not insurers for high health spending

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Health spending continues to be a concern in America, with projections as high as $4.5 trillion by 2019. In looking for someone to blame, however, a new study published today in the journal Health Affairs suggests that before we jump all over private insurance companies, we should focus our attention on Medicare. 

The study stems from a 2009 New Yorker article written by Atul Gawande in which he cites a statistic that Medicare spending in McAllen, Texas per member per year in 2007 was 86 percent higher than comparable spending in El Paso. 

When researching whether similar figures could be compiled for private insurers, however, study authors Luisa Franzini, Osama Mikhail and Jonathan Skinner instead discovered almost the exact opposite. Medical use and expense data gathered from Blue Cross and Blue Shield of Texas showed that spending per member per year for those insured by company was 7 percent lower in McAllen than it was in El Paso. 

"[O]ur study is consistent with Gawande's finding of a ‘culture of money'--increasing the use of profitable Medicare services when there is diagnostic and procedural discretion and clinical latitude," the authors write. "[B]ut...such a culture may also be constrained by private insurance plans with their more stringent reviews of the use of medical services." 

For example, Mikhail, a senior vice president for strategic planning at the University of Texas Health Science Center at Houston, points out that where the BCBS of Texas encourages its members with "big ticket conditions" to participate in disease management programs, complete with pre- and post-admission counseling, Medicare is not as stingy about what it does and doesn't allow. 

Still, the authors are quick to point out the study's limitations. For example, only two regions in Texas were examined, and healthcare needs and services rise as people age. 

"Variation in and of itself isn't necessarily bad," said Franzini, an associate professor of management, policy and community health at the Fleming Center for Healthcare Management at the University of Texas and the study's lead author. "But large variations may be a signal that something else is going on as well." 

To learn more:
- check out the study's abstract
- here's the study's press release

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