Health Affairs has released a study examining per capita medical spending under Medicare and private insurance.  The research follows a 2009 New Yorker article which found that per capita medical spending on Medicare beneficiaries was 86 percent higher in McAllen, Texas than in El Paso, Texas.  The researchers compared private per capita medical spending in the same cities to determine whether such a disparity existed among the privately insured.  Comparing the cities’ per capita health spending on adults with coverage through Blue Cross and Blue Shield of Texas (BCBS), the authors found that per capita spending for BCBS beneficiaries was 7 percent lower in McAllen than in El Paso.  The findings indicate a significantly smaller spending disparity exists under private coverage than observed under Medicare.  The authors conclude that health care providers respond to Medicare incentives significantly differently than they respond to those offered by private health insurers.

Franzini, L., Mikhail, O. I., and Skinner, J. S. (2010). McAllen And El Paso revisited: Medicare variations not always reflected in the under-sixty-five population. Health Affairs, 29(12): 2302-2309. doi: 10.1377/hlthaff.2010.0492. http://content.healthaffairs.org/content/29/12/2302.abstract

Authors: Luisa Franzinin, Osama I. Mikhail, and Jonathan S. Skinner