Just about everyone knows that Medicare spending varies depending on geography. Just about no one knows why.
A recent Health Affairs Health Policy Brief reviewed current theories on why, for example, Medicare spent an average of $15,957 per beneficiary in Miami, Florida, and $6,569 per beneficiary in Grand Junction, Colorado, and found most explanations lacking. "Even after multiple factors are considered, some geographic differences remain unexplained," the report states. In 2012, Medicare spent a national average of $9,503 per beneficiary.
The policy brief reviewed research around possible explanations for the disparities, including the amount Medicare pays for services, the health status of beneficiaries, and variations in use. Authors couldn't point to a consistent explanation, nor were they able to discount a 2013 Institute of Medicine report that asserted that higher costs were not always related to better outcomes.
Further complicating matters, according to the report, is the idea that the geographic differences seem to be specific to Medicare. "When researchers look at health care spending for different populations, such as people with private insurance or those covered by Medicaid, they do not find the same patterns seen in Medicare spending," the authors write.
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