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UTHealth study suggests private insurers control health care spending better than Medicare
Date:12/7/2010

up 23 percent above those in El Paso, still significantly below the 86 percent Medicare difference.

Researchers explored several potential explanations for their findings. Neither differences in health care prices nor population disease burden between the two cities accounted for these spending variations.

The most probable explanation, they speculate, has to do with which payers are better at controlling costs around what Mikhail calls the "grey zone of treatment" areas where legitimate medical judgments can be quite variable. According to Mikhail, health care needs and service use generally increase as the population ages, thereby expanding "the grey zone of treatment and opening the door to greater variation," which could explain greater variability in private insurance spending for the over 50 population (compared to the under-50) in McAllen versus in El Paso. Medicare exercises very little utilization management, whereas private insurers, such as Blue Cross Blue Shield of Texas, can be more active about controlling service use.

For example, Blue Cross and Blue Shield of Texas encourages members with costly "big ticket" conditions to participate in a disease management program. Other mechanisms encourage providers to practice evidence-based, cost-effective care. In addition, all elective inpatient admissions must be preauthorized. Pre-admission and post-discharge counseling are used to establish postoperative goals and identify discharge planning needs.

"We are pleased to participate in a study that sheds some light on the cost of care and how utilization/disease management and other initiatives can help to control costs," says Darren Rodgers, president of Blue Cross and Blue Shield of Texas.

"We've launched a range of initiatives to fight the rise in health care costs, plus we encourage our members to be smart consumers of health care by knowing how their coverage works, providing cost and quality information about
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Contact: Jade Waddy
jade.waddy@uth.tmc.edu
713-500-3307
University of Texas Health Science Center at Houston
Source:Eurekalert

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