April 6, 2011Ladies and Gentlemen:Most Texans know that our state government faces significant financial challenges today. As Comptroller, it’s my duty to watch trends that a 
ff 
ect our bottom line. One of the mostimportant forces driving the current fiscal crunch is the spiraling cost of health care services. As a contribution toward understanding and exploring this pressing issue, I hope you will findour new report,
State Health Care Spendin
g, a helpful resource.In fiscal 2009, more than 50 Texas state agencies spent more than
$30 billion
in state, federaland other funds on health care, including Medicaid payments, mental health services, employeehealth insurance and health care for prisoners.
at’s more than a third of all state spending.
ese costs are mounting at an alarming rate.In the five years between fiscal 2005 and 2009, Texas’ health care costs leaped by 36.1 percent— nearly four times as fast as the inflation rate, and more than
 four times 
as fast as the state’spopulation growth.
is report examines the factors behind this surge, examining expenditures by agency andidentifying major cost drivers for each.
e report also provides recommendations that couldhelp the state begin to address these skyrocketing costs.By taking steps now, we can more e
ff 
ectively contain rising costs while maintaining vital healthcare services for all Texans.Sincerely,Susan Combs
 
Susan Combs
 
Texas Comptroller of Public Accounts
To view the endnotes and appendices for this study, please visit
www.window.state.tx.us/specialrpt/healthcare/
e
Endnotes
show detailed information about the sourcesused in the report.
Appendix I
contains the definition of health care as used in this report;
Appendix II
is a detailedexamination of health care expenditures by agency; and
Appendix III
contains information regarding regionalvariations in state health services costs, comparing Medicaid, Employees Retirement System of Texas andBlueCross BlueShield of Texas services.
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