MedPAC has released another report in which they have tried to explain variation in healthcare utilization among metropolitan statistical areas (MSAs), of which there are approximately 400. MSAs more-or-less correspond to Dartmouth’s 306 hospital referral regions (HRRs), and the conclusions reached by the Dartmouth folks and MedPAC tend to correspond. In commenting about MedPAC’s last report, issued in December 2009, I noted that the major variation was caused by high Medicare expenditures in seven southern states, where patients are poorer and sicker and use much more care.
In their new report, MedPAC went a step beyond measuring expenditures, which they adjusted for prices and other factors in their last report, to measuring the actual units of service, a far better way to assess the healthcare system. MedPAC’s new findings on the distribution of service use in MSAs are graphed below:
Based on this new approach, MedPAC concluded: “Although service use varies less than spending, the amount of service provided to beneficiaries still varies substantially. Specifically, service use in higher use areas (90th percentile) is 30 percent greater than in lower use areas (10th percentile); the analogous figure for spending is about 55 percent. What policies should be pursued in light of these findings is beyond the scope of this paper, which is meant only to inform policymakers on the nature and extent of regional variation in Medicare service use. However, we do note that at the extremes, there is nearly a two-fold difference between the MSA with the greatest service use and the MSA with the least.” Read more »
*This blog post was originally published at PHYSICIANS and HEALTH CARE REFORM Commentaries and Controversies*