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GAO-04-1000R 1 (2004-08-18)

handle is hein.gao/gaocrptapqz0001 and id is 1 raw text is: 



  SGAO

       Accountability * Integrity  Reliability
United States Government Accountability Office
Washington, DC 20548


         August 18, 2004

         The Honorable Paul Ryan
         House of Representatives

         Subject: Milwaukee Health Care Spending Compared to Other Metropolitan Areas:
                 Geographic Variation in Spending for Enrollees in the Federal Employees
                 Health Benefits Program

         Dear Mr. Ryan:

         Health care spending varies across the country due to differences in the use and price
         of health care services. Understanding the reasons for utilization and price variation
         may contribute to developing methods to control health care spending. This report
         provides preliminary results from our work on geographic variations in health care
         spending and prices.

         You asked us to examine geographic variations in health care spending and prices in
         the Federal Employees Health Benefits Program (FEHBP). FEHBP is the health
         insurance program administered by the Office of Personnel Management (OPM) for
         federal civilian employees and retirees, which covered 8.5 million people in 2001.
         FEHBP contracts with private insurers to provide health benefits. It is the largest
         private insurance program in the United States. This report summarizes preliminary
         information provided to you at an interim briefing on July 21, 2004. The enclosed
         briefing slides (see enc. I) highlight the results of our work comparing Milwaukee to
         other areas of the country. The objectives of the briefing were to (1) compare
         Milwaukee health care spending per enrollee, hospital inpatient prices, and physician
         prices with other metropolitan areas, and (2) examine factors identified by
         stakeholders in Milwaukee that may affect health care spending and prices.

         To estimate spending and prices in Milwaukee and other metropolitan areas, we
         analyzed 2001 claims data for enrollees under the age of 65 from the largest national
         insurers participating in FEHBP. We defined price as the payment by insurers and
         enrollees to a provider for a service. Spending was the sum of payments across all
         providers for each enrollee. We analyzed mean spending per enrollee, mean inpatient
         price, and mean physician price in Milwaukee and other metropolitan statistical areas
         (MSA) across the country. Out of a total of 331 MSAs, we included 239 MSAs in the
         spending per enrollee and inpatient price analyses and 319 in the physician price
         analysis. We also interviewed key stakeholders in Milwaukee to identify factors they
         thought affected health care spending and prices. Key stakeholders included
         representatives of health insurance companies, hospital networks, physician
         networks, and large employers. To determine if these factors could affect geographic


GAO-04-1000R Milwaukee Health Care Spending

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