Geek alert: New report on geographic variation in Medicare spending

Huge variations in health care spending per person between different regions of the US have generated a lot of interest in the last year or two. The variations cannot be explained by the incidence of disease, demographics, or even prices. You won’t be surprised to hear that CT is a very expensive state. There is a large body of literature showing that higher spending does not correlate with quality. While this is controversial, there is even evidence that higher spending is linked to lower quality of care. This research, spearheaded by the Dartmouth Atlas project, has generated great hope (and high expectations) that we can learn what more efficient regions are doing right, take what we learn to other regions, and both save money and improve people’s health. (We were very lucky to hear from Dartmouth’s Elliot Fischer, a leader in this research, at last summer’s CSG/ERC annual meeting.) If we can figure this out, it could save as much as 30% in health care spending. (Now do I have your attention?)

A new report by Medicare actuaries sheds more light on these regional differences. Surprise #1 – they found no difference between patients who died that year and those who didn’t – it’s not end of life spending. Sort of surprising – they found that the variation is greatest in post-acute care spending (nursing homes, home health care, inpatient rehab hospitals, durable medical equipment, long term care hospitals, etc.) not inpatient or ambulatory care. Variation in post-acute care spending can range from $60 to $450 between regions. There’s lots more in the report but I’ve probably lost all but the most wonky readers by now. Read it.
Ellen Andrews