Medicare Spending Variations by Region the Result of Sicker Patients

Yet another new study disputes the “conventional wisdom” that geographic variation in Medicare spending is the result of one region being less efficient than another.

“People really are sicker in some parts of the country,” one of the authors of the new study, Dr. Patrick Romano, told Kaiser Health News.

“Geographic Variation in Fee-for-Service Medicare Beneficiaries’ Medical Costs Is Largely Explained by Disease Burden,” a study by James D. Reschovsky, Jack Hadley, and Dr. Romano and published in Medical Care Research and Review analyzed data from 1,565,147 elderly Medicare fee-for-service beneficiaries and found that one of the most common assumptions about healthcare statistics may very well be false, namely that the quantity of medical services required for patients at the end of life are relatively unaffected by geography. Instead their research found that in some regions people are more likely sicker and in others less so.

The new study puts the researchers at odds against the 500-pound gorilla of health care research, the Dartmouth Institute for Health Policy & Clinical Practice. Jordan Rau  at Kaiser Health News has put together an excellent story of “he said/she said” between the authors of  study appearing in Medical Care Research and Review and the researchers at Dartmouth Institute, who for 30 years have influenced healthcare policy leaders and are the authors of the widely respected Dartmouth Atlas of Health Care.

Dartmouth Institute research has convinced many healthcare policy makers that regional differences are the result of waste and inefficiency and by leveling the regional spending on healthcare substantial savings can be had in Medicare. As KHN reports, Dartmouth Institute claims it has never advocated that approach, but at the same time defends its research and, as one Dartmouth economist put it, finds the new study “fatally flawed.”