As healthcare costs consume an increasingly large share of the U.S. gross domestic product, researchers have been working to identify the root of unwarranted geographic spending variation in order to identify ways to improve efficiency.
A new report from The Commonwealth Fund offers insight into healthcare spending variation in Texas. Researchers analyzed claims data from Blue Cross Blue Shield of Texas for more than 2 million people younger than 65 enrolled in preferred provider organization plans. The researchers also analyzed publicly available data from CMS. Here are four of their key findings.
1. Medicare annual medical spending per beneficiary was $6,717 on average. Thirty-nine percent of that amount went toward professional services, 18 was for outpatient care and 43 percent was for inpatient care.
2. BCBS of Texas average total spending per member annually was $3,702. Eight-two percent of that amount was medical spending, and 18 percent was spent on pharmacy services. Of the medical spending portion, 42 percent went to professional services, 32 percent was spent on outpatient care and 26 percent was spent on inpatient care.
3. Variations in BCBS spending by Medicare hospital referral region were mainly caused by price variation, according to the report. Nearly 86 percent of hospital inpatient spending variation was driven by prices for BCBS members. Price variation accounted for 33.1 percent of spending variation for total medical spending for BCBS members.
4. Meanwhile, 22.4 percent of hospital inpatient spending and 6.9 percent of total medical spending on Medicare beneficiaries was driven by price variation. Among Medicare beneficiaries in Texas, spending variation seems to be driven mainly by utilization, according to the report.
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