{"subscriber":false,"subscribedOffers":{}} Prices Don’t Drive Regional Medicare Spending Variations | Health Affairs

Research Article

Prices Don’t Drive Regional Medicare Spending Variations

Affiliations
  1. Daniel J. Gottlieb ( [email protected] ) is a research associate at the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, New Hampshire.
  2. Weiping Zhou is a research associate at the Dartmouth Institute.
  3. Yunjie Song is a statistical research analyst at the Dartmouth Institute.
  4. Kathryn Gilman Andrews is a Post-Bachelor Fellow at the Institute for Health Metrics and Evaluation in Seattle, Washington.
  5. Jonathan S. Skinner is a professor at the Department of Economics, Dartmouth College, in Hanover, New Hampshire.
  6. Jason M. Sutherland is an assistant professor at the School of Population and Public Health, University of British Columbia, in Vancouver.
PUBLISHED:No Accesshttps://doi.org/10.1377/hlthaff.2009.0609

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? To answer this question, we 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.

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