The Latest on Geographic Variation in Medicare Spending: A Demographic Divide Persists But Variation Has Narrowed
Introduction
A. Gawande, "The Cost Conundrum: What a Texas Town can Teach Us about Health Care," New Yorker (June 2009); available at http://www.newyorker.com/magazine/2009/06/01/the-cost-conundrum.
Hospital referral regions (HRRs) are regional markets for tertiary medical care including at least one hospital performing major cardiovascular procedures and neurosurgery. See "Appendix on the Geography of Health Care in the United States" in Center for the Evaluative Clinical Sciences Dartmouth Medical School, The Quality of Medical Care in the United States: A Report on the Medicare Program, 1999; available at http://www.dartmouthatlas.org/atlases/99Atlas.pdf.
E.S. Fisher, D.E. Wennberg, T.A. Stukel, D.J. Gottlieb, F.L. Lucas, E.L. Pinder, "The Implications of Regional Variations in Medicare Spending. Part 2: Health Outcomes and Satisfaction with Care," Annals of Internal Medicine 138, no. 4 (February 18 2003): 288-298.
J. Skinner, E.S. Fisher, Reflections on Geographic Variations in U.S. Health Care, May 12 2010; available at http://www.dartmouthatlas.org/downloads/press/Skinner_Fisher_DA_05_10.pdf.
J.D. Reschovsky, J. Hadley, P.S. Romano, "Geographic Variation in Fee-for-Service Medicare Beneficiaries’ Medical Costs Is Largely Explained by Disease Burden," Medical Care Research and Review OnlineFirst (May 28 2013); available at http://mcr.sagepub.com/content/early/2013/04/26/1077558713487771.abstract.
S. Zuckerman, T. Waidmann, R. Berenson, J. Hadley, "Clarifying Sources of Geographic Differences in Medicare Spending," New England Journal of Medicine 363, no. 1 (July 1 2010): 54-62.
L. Sheiner, "Why the Geographic Variation in Health Care Spending Cannot Tell Us Much about the Efficiency or Quality of Our Health Care System," Brookings Papers on Economic Activity, Vol. 2014, No. 2, 2014, pp. 1-72.
J.P. Newhouse, A.M. Garber, R.P. Graham, M.A. McCoy, M. Mancher, A. Kibria, et al., editors. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington (DC): National Academies Press, 2013.
Data and Methods
Centers for Medicare & Medicaid Services, Medicare Data for the Geographic Variation Public Use File: A Methodological Overview, February 2015; available at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Geographic-Variation/Downloads/Geo_Var_PUF_Methods_Paper.pdf.
Findings
The top 20 counties are different when ranked by total, rather than per capita, Medicare spending in 2013. Nine counties appear on both lists, but some counties—most likely by virtue of the number of traditional Medicare beneficiaries residing in the county (e.g., Cook County, Illinois; Maricopa County, Arizona; and San Diego County, California)—appear on the list of 20 highest-spending counties by total spending but not by per capita spending.
See Figure 4 in Congressional Budget Office, Geographic Variation in Health Care Spending, February 2008, Pub. No. 2978; available at http://www.cbo.gov/ftpdocs/89xx/doc8972/02-15-GeogHealth.pdf.
Appendix 1: Data and Methods
Centers for Medicare & Medicaid Services, Medicare Data for the Geographic Variation Public Use File: A Methodological Overview, February 2015; available at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Geographic-Variation/Downloads/Geo_Var_PUF_Methods_Paper.pdf.
Health Resources and Services Administration, Technical and User Documentation for the 2013-2014 County Area Health Resources Files, 2015; available at http://datawarehouse.hrsa.gov/DataDownload/ARF/AHRF_USER_TECH_2013-2014.zip.
We calculated the annual growth rate in x from 2007 to 2013 as
