Study: Private Plans May Trump Medicare At Controlling Costs.

Study: Private Plans May Trump Medicare At Controlling Costs.

The Hill (12/8, Millman) reports, "Private insurance plans might be better at controlling healthcare costs than Medicare, according to a Health Affairs study released Tuesday morning." Notably, the "study followed up on an influential 2009 New Yorker article that found Medicare spending on the elderly population is significantly higher in McAllen, Texas, than it is in El Paso, Texas. Using medical and expense data for patients in those towns who are privately insured by Blue Cross and Blue Shield, researchers found private insurers were cheaper and had a more consistent cost structure."

        CQ HealthBeat (12/8, Adams, subscription required) reports, "The new study cannot explain definitively why differences in health care spending are lower under private coverage, but the authors suggest that mechanisms for utilization review and management used by private insurers could play a big role." They also "said the most probable explanation is based on which payers are better at controlling costs in areas where legitimate medical judgments can vary. Medicare exercises very little utilization management, but private insurers can be much more aggressive about controlling services."

        Modern Healthcare (12/8, Vesely, subscription required) reports that according to lead study author Luisa Franzini, "For a number of reasons, insurers generally are reluctant to intrude on medical decision-making. ... But the fact that these utilization management mechanisms exist may prompt some physicians who might otherwise overuse certain services to exercise more restraint."

        NPR (12/8, Rau) notes in its Shots blog, "The new study analyzed claims from 65,701 Blue Cross members in McAllen's Hildago County and 66,657 members in El Paso. Blue Cross spent $2,266 on the average McAllen enrollee, compared to $2,428 on the average El Paso enrollee." In "contrast, Medicare spent an average of $14,817 per patient in McAllen -- 86 percent above the $7,947 it spent on an average El Paso enrollee, according to the study." The Washington D.C. Examiner