regional differences in Medicare spending

A recently published study reports that geographic differences in the amount that Medicare reimburses hospitals varies not by wasteful overtreatment by instead by population health differences across the country.  The authors point out that these differences in health explain explain between 75% and 85% of the cost variations.

The study might seem like a sour note to those who believe that huge savings in health care can be achieved by making the system more efficient and inducing those “aggressive treatment” areas to reduce wasteful spending.  Researchers at the Dartmouth Institute for Health Policy claim that the study is fatally flawed, and that regional differences in spending are much more dependent on overtreatment and wasteful practice.

But even if the new study is correct, somewhere between 15 and 25% of the differences in regional Medicare spending are NOT explained by the underlying health of the region’s population.  That’s still a sizeable chunk of money, and certainly an area worth improving.


About justgngr

the ramblings of a medical professional by day, judgmental ginger by night
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One Response to regional differences in Medicare spending

  1. Another aspect to the range in Medicare reimbursement hasn’t been mentioned anywhere that I see. If the hospital has to care for a large portion of uninsured patients in our current system those losses are often made up by charging the insured patients more. In the midwest where I trained there were few uninsured patients so the hospital could charge each patient less and still stay in business. But now I work in California where the number of homeless and illegal immigrants who are completely uninsured is much higher. Therefore the hospitals have to charge insured patients more to make up the difference. This is not the hospital’s fault, it is the fault of our completely broken healthcare system and lack of political will to come up with a real viable alternative.

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