Medpac examines regional differences in use of medical care

The New York Times Prescriptions blog: "A federal advisory panel said Tuesday that regional differences in the use of health care services were substantial but smaller than many experts had suggested. The panel, the Medicare Payment Advisory Commission, found that the use of services by Medicare beneficiaries in the Miami area was almost 40 percent higher than the national average. ... Medicare beneficiaries in nonurban counties of Hawaii had the lowest use of services. ... Such variations have emerged as an explosive issue in the Congressional debate on legislation to overhaul the health care system. Lawmakers from lower-cost states like Iowa, Minnesota, Washington and Wisconsin say their doctors and hospitals provide efficient and high-quality care but are shortchanged by Medicare."

"The Medicare commission said: 'Regional variation in service use is not equivalent to regional variation in Medicare spending. The two should not be confused.' ... Medicare spending per beneficiary varies much more than the use of services, and some of those disparities reflect official policy, the commission said. Under formulas set by Congress, for example, some Medicare payments are adjusted to reflect local wage levels and office rents. Medicare makes extra payments to hospitals that train doctors or treat large numbers of low-income patients. Many small hospitals in isolated rural areas also receive extra payments" (Pear, 12/1). 

CQ reports that while the differences were less extreme than expected, "Dartmouth researcher Elliott Fisher said in an interview that follow-up work at the college on levels of health care use is consistent with the MedPAC findings. ... 'The implications for health care reform remain unchanged: if all regions could avoid unnecessary hospital stays and treatments as effectively as the lower spending regions, Medicare spending could be reduced by 20 percent or more'" (Reichard, 12/1).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.