New Report Points to Variations in Medicare Spending, Service Use
A new Medicare Payment Advisory Commission study found regional variations in Medicare spending and in the amount of health services used by beneficiaries, though the differences are lower than previous research suggested, the New York Times' "Prescriptions" reports (Pear, "Prescriptions," New York Times, 12/1).
The study emphasizes, "Regional variation in service use is not equivalent to regional variation in Medicare spending. The two should not be confused."
MedPAC researchers adjusted for different regional payment rates and the health statuses of different patients.
According to the research, "[a]lthough service use varies less than spending, the amount of services provided to beneficiaries with similar resource needs still varies substantially."
"[R]egional variation in the use of Medicare services reflects only differences in the volume and intensity of services that beneficiaries with comparable health status receive," the study adds (Reichard, CQ HealthBeat, 12/1).
The fluctuation in regional Medicare spending is caused by a variety of factors. Congressionally approved formulas set some Medicare payments to reflect local wage levels and office rents. In addition, Medicare pays more to hospitals in isolated rural areas, hospitals that train doctors and hospitals that treat a high number of low-income patients ("Prescriptions," New York Times, 12/1).
According to CQ HealthBeat, "Spending itself isn't an accurate measure of service variation" because it reflects regional payment differences.
Miami-Dade County Tops List for Most Medicare Services Used
The study uncovered an approximately 30% difference between the amount of services used by regions in the 90th percentile and the regions in the 10th percentile of service use. Miami-Dade County, Fla., had the highest level of service use with nearly double the number of services as non-metropolitan Hawaii, the region with the lowest level of service use (CQ HealthBeat, 12/1).
Miami-Dade's service use was nearly 40% higher than the national average and 10% higher than the average for other large, urban areas ("Prescriptions," New York Times, 12/1).
Doctors in Miami may use more medical services because of their Medicare patients' "predilection for care," the report found, though it also said that the region's spending on durable medical equipment and home health care were both seven times higher than the national average, raising "concerns about fraud and abuse by some providers" (CQ HealthBeat, 12/1).
While New York City and Boston are reputed to have very high levels of health spending, MedPAC found that the use of health services per beneficiary was 98% of the national average in New York City and equal to the national average in Boston. In San Jose and Sacramento, service use was 82% of the national average ("Prescriptions," New York Times, 12/1).The study also revealed variations in service use in different parts of the same state and even in different parts of the same metropolitan region (CQ HealthBeat, 12/1). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.