Regional Variation in Medicare Spending May Be Exaggerated
A recent MedPAC report finds that although raw per capita spending is 55% higher for beneficiaries in the area at the 90th percentile than for beneficiaries in the area at the 10th percentile, after adjustment for relevant factors, utilization is only about 30% greater. Approximately, 45% of the regular Medicare population lives in areas that have service use within 5 percent of the national average.
This is from Jason Shafrin at the Healthcare Economist blog.
The more people delve into the data, the less reliable the Dartmouth results seem to be.
I agree with Ken. There probbly is 30% waste in the health care system. But how to get rid of it is not easy or obvious. What’s misleading about news reports about the Darmouth findings is the implied suggestion that if dcotor group A would just practice medicine like doctor group B, we could lower costs by one third. It’s not that simple.
Richard Cooper has done a good job deciphering and debunking much of the Darmouth regional variations claims. He has shown that what the pundits put forth as proof of wasteful spending (variation in Medicare claims and payouts) is a product of higher rates of poverty (with resulting poor health status and higher medical expenditures) between regions being compared.
http://buzcooper.com/
A question I have posed related to places like Miami and McAllen, TX is the fact that both of these places are “snowbird” refuges where retirees relocate during winter months thus skewing Dartmouth’s population analysis of these areas which is then used to demonstrate that Medicare expenditures are excessive.
Tom Saving and his colleagues at Texas A & M have done studies for the NCPA on this question and find that very little savings are possible by trying to make some regions of the country practice medicine the way it is practiced in other regions.