This finding suggests there may be a great deal of savings to be had for Medicare ACOs that engage in effective utilization management because ACO savings will be based on a benchmark of current Medicare spending.
Following up on a widely noted study finding much higher Medicare payments in McAllen, Texas, than in El Paso, the new study found the opposite for private insurance payments. That is, for the under-65 population insured by Blue Cross Blue Shield of Texas, total spending per-member-year in McAllen was 7 percent lower than in El Paso.
Researchers speculate private payors are better at controlling costs around the “grey zone of treatment,” where legitimate medical judgments may vary. “Medicare exercises very little utilization management, whereas private insurers, such as Blue Cross Blue Shield of Texas, can be much more assertive about controlling service use,” the release said.
Read the Health Affairs release on healthcare costs.
Read more coverage of variations in costs:
– Study on Variances in Hospital Pricing ‘Deeply Flawed,’ AHA Says
– Dominant Hospitals Charge 2-3 Times More, Oregon Price-Reporting Shows
