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Regional Variation in Health Care Spending

New Study Underscores Importance of Regional Variations in Spending: An article by Jason Sutherland, Elliott Fisher and Jonathan Skinner, published in the New England Journal of Medicine in September 2009, examines the key role of regional factors in explaining variations in health care spending. Some critics of the Dartmouth work have asserted that individual health and socioeconomic status explain most of the variation across U.S. regions. The New England Journal article by the Dartmouth faculty uses data from a national survey of Medicare beneficiaries to show that individual health status is a major determinant of spending; beneficiaries in excellent health spend an average of $3,469 per year, while those in poor health spend six times as much ($21,064). Similarly, low income Medicare enrollees spend more than high income enrollees. However, these factors combined could not explain away the wide regional variations in health care expenditures. Specifically, the authors found that just 30% of the excess spending in the highest-cost regions could be attributable to income and health, leaving the vast majority of expenditures due to regional factors. The findings reinforce the longstanding Atlas conclusions that the variations in spending across regions and hospitals provide evidence of important opportunities to reduce the costs of U.S. health care.

September 30, 2009 - Posted by | healthcare | , , ,

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