Medicaid/Medicare Medicare Public Policy

Regional Differences in Medicare Spending and Health Status

Previous research by the team at Dartmouth Atlas found that there is significant regional variation in spending and disease diagnosis frequency, but this variation is not correlated with higher quality.  However, regional variation may be overstated.  According to Zuckerman et al. (2010):

Unadjusted Medicare spending per beneficiary was 52% higher in geographic regions in the highest spending quintile than in regions in the lowest quintile. After adjustment for demographic and baseline health characteristics and changes in health status, the difference in spending between the highest and lowest quintiles was reduced to 33%. Health status accounted for 29% of the unadjusted geographic difference in per-beneficiary spending; additional adjustment for area-level dif ferences in the supply of medical resources did not further reduce the observed differences between the top and bottom quintiles.

The authors used 2000-2002 data from the MCBS to draw these conclusions.  They controlled for age, sex, race, urban/rural, self-reported health status, smoking status, BMI, previous diagnoses of diabetes or hypertension, family income, supplementary insurance coverage, and area-level supply of medical resources.  The analysis was conducted at the HRR level.

If regional variation is spending is mostly due to disease burden rather than practice patterns, efforts to change practice patterns at the region level may prove fruitless.


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