The Implications of Regional Variations in Medicare Spending: The Content, Quality, and Accessibility of Care

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The summary below is from the full report titled "The Implications of Regional Variations in Medicare Spending. Part 1: The Content, Quality, and Accessibility of Care." It is in the 18 February 2003 issue of Annals of Internal Medicine (volume 138, pages 273-287). The authors are ES Fisher, DE Wennberg, TA Stukel, DJ Gottlieb, FL Lucas, and ÉL Pinder.

What is the problem and what is known about it so far?

Medicare is the public health insurance program for Americans over age 65. Medicare spending in different geographic regions of the United States varies widely. For example, in 1996, the average spending for each Medicare patient was $8414 in Miami and $3441 in Minneapolis. Reasons for this variation include regional differences in prices, in general health, and in the amount of health care services that patients and doctors use. If higher health care spending in a region led to healthier and more satisfied patients, we might think that the money was well spent. If higher spending did not result in these benefits, we would worry about waste.

Why did the researchers do this particular study?

To see whether Medicare patients who live in regions that spend more on Medicare receive better-quality care.

Who was studied?

Using national Medicare data, the researchers studied 614,503 patients hospitalized for hip fracture, 195,429 patients hospitalized for colon cancer, and 159,393 patients hospitalized for heart attacks during 1993–1995. In addition, the authors studied 18,190 typical Medicare patients who had completed a survey.

How was the study done?

The researchers divided the United States into 306 regions based on where people go for hospital care. They then calculated how much the Medicare program spent during the last 6 months of life for people who died in each region during July 1994–December 1997. Next, they divided the 306 regions into five groups according to the spending levels. The researchers used end-of-life spending as a measure of general Medicare spending. The researchers then looked at the type of services used, the quality of care, and the access to care across regions of different Medicare spending levels.

What did the researchers find?

For the four patient groups, measures of health were similar across the five spending levels. However, those who lived in high-spending regions had 60% more care (mostly due to more frequent doctor visits, tests, and minor procedures and more specialist and hospital care) than those who lived in low-spending regions. Yet the researchers found no evidence of better quality of care, better access to care, or better patient satisfaction in high-spending regions. In fact, patients in the highest-spending regions received some preventive services less often than patients in lower-spending regions.

What were the limitations of the study?

The researchers looked at a limited number of patient groups and a limited number of measures of quality and access to care. It is possible that quality of care and access might be better for other conditions or for other measures.

What are the implications of the study?

Medicare patients who live in areas that spend more on Medicare do not necessarily get better care than those who live in regions that spend less.