Health care spending by insurance companies, government agencies and individuals in California totaled $6,238 per resident in 2009, less than the national average of $6,815, according to a CMS report released on Wednesday, the Los Angeles Times reports (Helfand, Los Angeles Times, 12/7).
The report is based on state data from 2005 to 2009 and was prepared by the Office of the Actuary at CMS (Norman, CQ HealthBeat, 12/7).
According to the report, just eight states spent less on health care per person than California.
Health care experts said one reason why California's health care spending is lower than the national average is that seven million residents, or about one in five Californians, do not have insurance.
They also pointed to low Medi-Cal reimbursement rates as another factor. Medi-Cal is California's Medicaid program. According to the study, California spent $4,569 per resident on low-income care in 2009, the lowest amount among any state.
In addition, the fact that California has a larger proportion of residents covered by HMOs than other states helps control costs, according to the Times.
Implications for California
The federal health reform law is expected to extend coverage to up to five million Californians in 2014 either through Medi-Cal or by offering subsidies for private insurance.
However, some health care experts say that low reimbursement rates and a growing number of physicians who do not accept government insurance could negatively affect the reform law's aim to expand insurance coverage.
Mark Smith -- president and CEO of the California HealthCare Foundation -- said, "While we expand coverage, we have to work on making the system more affordable and more accessible to people." CHCF publishes California Healthline (Los Angeles Times, 12/7).
Nationwide, health care spending in 2009 varied by region, with New England states spending 29% more than the national average of $6,815 per person, according to the report.
Rocky Mountain and Southwest states had the lowest spending levels with an average of 15% below the national average (McCarthy, National Journal, 12/7). Massachusetts and New York were among the 10 highest-spending states in 2009, while Texas was among the 10 lowest-spending states that year, the report found (CQ HealthBeat, 12/7).
States that spent less on health care typically had more young residents, lower per-capita incomes and larger uninsured populations, while states with older and more affluent residents tended to spend considerably more on health care, the report found (Zigmond, Modern Healthcare, 12/7). However, the report did not offer a likely reason for the spending gap or make recommendations on how to address it.
Spending Gap Appears To Be Growing, Report Finds
The spending gap among states appears to be growing, according to the report.
States with the highest per-capita health care spending reported growth that was faster than the national average, while states with the lowest per-capita health care spending reported lower growth than the national average across the five-year period (CQ HealthBeat, 12/7).
Details on Medicaid, Medicare Spending
In 2009, 30 states had per capita Medicaid spending levels higher than the national average of $6,815, even though they accounted for just 41% of total beneficiaries (National Journal, 12/7).
For Medicare, 14 states had higher per capita spending levels than the national average, but the report noted that those states typically had more elderly residents (Modern Healthcare, 12/7).