A New Study Says – Apparently Not
Per capita Medicare spending is more than twice as high in New York City and Miami than in places like Salem, Oregon.
How much of these differences can be explained by Medicare’s paying more to compensate for the higher cost of goods and services in such areas?
The Study
According to Daniel J. Gottlieb, Weiping Zhou, Yunjie Song, Kathryn Gilman Andrews, Jonathan S. Skinner and Jason M. Sutherland – not much!
The Answer
The authors analyzed Medicare spending after adjusting for local price differences in 306 Hospital Referral Regions. The price-adjustment analysis resulted in less variation in what Medicare pays regionally, but not much.
The findings suggest that utilization—not local price differences—drives Medicare regional payment variations, along with special payments for medical education and care for the poor.
Assessment
http://content.healthaffairs.org/cgi/content/full/hlthaff.2009.0609v1
Conclusion
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Filed under: Health Economics, Healthcare Finance | Tagged: Daniel J. Gottlieb, Hospital Referral Regions, Jonathan S. Skinner and Jason M. Sutherland, Kathryn Gilman Andrews, medicare, Weiping Zhou, www.HealthAfairs.org, Yunjie Song |
Recently, the Medicare trustees issued their annual assessment of the government insurance program’s fiscal health.
The prognosis: the trust fund (covering hospital stays) will be exhausted by 2024; that’s five years earlier than they predicted last year; the sluggish economy has led to lower payroll taxes, but health costs keep going up.
http://www.ssa.gov/oact/trsum/index.html
Sarah
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Spending Variation for Privately Insured Patients’ Knee/Hip Replacements
Spending per episode for uncomplicated knee and hip replacements varied more than twofold across 36 hospitals in nine markets (Buffalo, N.Y.; Cleveland; Detroit; Flint, Mich.; Indianapolis; Kansas City; Lansing, Mich.; Louisville, Ky.; and Warren, Mich.).
Among the lowest-spending hospitals, spending for knee and hip replacement episodes ranged from $17,000 to $20,000, dramatically lower than the highest hospitals, where spending was close to or more than $35,000.
These spending variations appear even though the procedure and recuperative process are fairly standardized, the population is fairly uniform-nonelderly manufacturing workers and retirees-and payments are adjusted for local input prices.
Average spending per knee and hip replacement episode also varied among the nine markets studied. The market average spending per episode ranged from below $25,000 in Louisville to more than $30,000 in Buffalo.
All but one of the markets had one or more low-spending hospitals-at or less than $25,000-and one or more high-spending hospitals-more than $25,000, suggesting that lower-spending hospitals are an option in most markets.
Source: National Institute for Health Care Reform (NIHCR)
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