Medicare and Private Spending Trends from 2008 to 2012 Diverge in Texas

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Background

Growth in health care spending has been decreasing since the mid-2000s, with the share of the economy devoted to health care actually declining from 2012 to 2013. The slowdown, however, varies according to who is paying, as private and public payers operate in distinct environments and face different incentives. Commonwealth Fund–supported researchers examined data from Blue Cross Blue Shield of Texas (BCBSTX), the largest insurer in the state, and from Medicare, to better understand the spending slowdown dynamics.

What the Study Found

Overall, spending per enrollee grew faster in BCBSTX than in Medicare. From 2008 to 2012, per person spending in Medicare grew only 1.5 percent per year on average, compared with 5.2 percent for BCBSTX. In that period, Medicare spending growth actually fell below the growth in national gross domestic product per capita. Use of outpatient services increased significantly in both populations, while inpatient utilization declined slightly.

There was a large difference in price trends: Medicare prices were 4 percent lower in 2012 than in 2008; in BCBSTX, prices were 4 percent higher. In addition, variation in spending by geographic region declined sharply in Medicare, owing to spending on postacute care in two notably high-spending regions, but variation rose slightly in BCBSTX.

Conclusions

Medicare has been successful in controlling spending and curbing excesses, the authors say, but “price increases continue to drive excess spending growth among the privately insured, and policies and reforms are needed to address these increasing spending trends.”

Publication Details

Publication Date:
March 9, 2015
Authors:
Luisa Franzini, Suthira Taychakhoonavudh, Rohan Parikh, and Chapin White
Summary Writer:
Deborah Lorber
Citation:
L. Franzini, S. Taychakhoonavudh, R. Parikh et al., “Medicare and Private Spending Trends from 2008 to 2012 Diverge in Texas,” Medical Care Research and Review, Feb. 2015 72(1):96–112.
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