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Federal Employees Health Benefits Program: Differences in Health Care Prices Across Metropolitan Areas Linked to Competition and Other Factors

GAO-06-281T Published: Dec 02, 2005. Publicly Released: Dec 02, 2005.
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Highlights

Differences in utilization of health care services across the country have been well documented, but less has been reported on geographic variation in price. As health care spending is the product of utilization and price, information on health care prices and factors contributing to price differences provides an additional perspective on drivers of health care spending. In an August 2005 report, GAO examined claims data on enrollees of preferred provider organizations (PPO) participating in the Federal Employees Health Benefits Program (FEHBP) and found substantial price variation across metropolitan areas, after adjusting prices to account for area differences in the cost of providing services and in the types of services provided. This statement is based on GAO's August 2005 report entitled Federal Employees Health Benefits Program: Competition and Other Factors Linked to Wide Variation in Health Care Prices (GAO-05-856). It focuses on (1) factors that underlie area differences in price and (2) the contribution of price to geographic differences in spending on health care.

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Comparative analysisCompetitionCost analysisEconomic analysisHealth insuranceHealth insurance cost controlHealth maintenance organizationsHospitalsMedical feesMedical services ratesPhysiciansPrice regulationPrices and pricingCapitation (medical care)