Prices Don’t Drive Regional Medicare Spending Variations:
How much of the variation in Medicare spending can be explained by Medicare’s paying more to compensate for the higher cost of goods and services in high-spending areas? An article in Health Affairsanalyses Medicare spending after adjusting for local price differences in 306 hospital referral regions. The price-adjustment analysis resulted in less variation in what Medicare pays regionally, but not much. The findings suggest that utilization – not local price differences – drives Medicare regional payment variations.
Technical report Appendix data
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