Prices Are Main Driver of Variation in Inpatient Hospital Spending in a Large Texas Health Plan

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<p>To control spending in health care, the U.S. must identify the causes of large geographic variations in spending. This <a href="/publications/journal-article/2014/jun/variation-inpatient-hospital-prices-and-outpatient-service">Commonwealth Fund–supported study</a>—published in <em>Health Services Research</em>—uses newly released data from the largest private insurer in Texas, as well as and Medicare data, to examine the drivers of spending in the public and private sectors. For Blue Cross Blue Shield of Texas, variation in hospital spending was driven largely by price differences. Although in other areas—such as physician visits and lab tests—varying use of services was the cause. Among Medicare beneficiaries, spending variation was driven mainly by sicker patients’ greater use of health services. </p>