Fast forward to this Health Affairs study. The study objective was simple: if Medicare's costs for McAllen vs. El Paso were out of control, the same should be true for other health insurance plans. That's what authors Luisa Franzini, Osam Mikhail and Jonathan Skinner anticipated when they obtained Blue Cross Blue Shield (BCBS) of Texas preferred provider organization (PPO) and point of service (POS) plan 2008 claims data for over 65,000 enrollees in each city and contrasted the results with Medicare data.
While they confirmed that McAllen's Medicare overall costs were 86% higher compared to El Paso, the BCBS data surprisingly showed that its McAllen's claims expense was 7% lower compared to El Paso's. For the BCBS enrollees that were between ages 50 and 64, the claims trended toward the Medicare pattern. For this group, overall spending was 89% higher in McAllen. This was mostly accounted for by higher levels of inpatient spending that was 117% higher versus El Paso; it was offset by lower use of outpatient services.
While the authors recognized that there were important contrasts in how Medicare and BCBS function, that health care costs can be highly variable and that there may be other demographic or socioeconomic dynamics at play, the authors also pointed to the Texas BCBS' use of population health management along with basic utilization management as another factor that allowed it to avoid Medicare's fate:
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