So what does this mean? Healthcare providers respond quite differently to incentives in Medicare compared to those in private insurer programs, study authors concluded. "Blue Cross and Blue Shield of Texas has developed several mechanisms to encourage cost-effective care by providers."
Among the tactics used by BCBS that might not be employed by Medicare, according to Franzini, are preauthorizations, provider utilization monitoring, case management efforts and stepped up prevention and wellness programs and incentives. In other words, meddling in provider (and patient) decision-making is effective … at least in some cases.
Chalk one up for health plans and their contentious rules which require physicians to clear procedures and medications before they are delivered.
But before insurers hang their hats on this report, they should realize that by the authors' own admission, the study is so localized, that it renders nearly futile the claim that private health plans do in fact control spending better than Medicare across the board. "McAllen is an extreme outlier in terms of Medicare per capita spending and is not typical," according to Franzini.
But she does admit it's a very intriguing development that is being explored on a wider scale. "This issue of variation in per capita expenditures in privately insured patients relative to Medicare variation deserves further study to see what lessons might be learned."