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Variation in Health Care Spending: Target Decision Making, Not Geography (2013)

Chapter: Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses

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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
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Appendix G

Selected Results of the Committee’s Commissioned Empirical Analyses

MEDICARE SERVICE CATEGORY UTILIZATION (MONTHLY COST RESIDUAL) BY HRR

To determine the extent to which variation in particular health care services contributes to total variation in Medicare expenditure, the Committee disaggregated price-standardized, risk-adjusted Medicare spending into seven types of services. Table G-1 sorts 306 hospital referral regions (HRRs) by their total monthly adjusted differences from the national mean of spending (also known as residual cost). This table serves as a supplement to Figure 2-5a–h (Medicare Service Category Utilization by Hospital Referral Region), in Chapter 2.1

_________________

1Information on other services categories are available on the Acumen Medicare spreadsheets, which can be accessed through the Institute of Medicine website (http://www.iom.edu/geovariationmaterials).

Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×

TABLE G-1
Medicare Service Category Utilization (Monthly Cost Residual) by Hospital Referral Region (HRR)

HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Rochester, NY -$174 -$43 -$79
Stockton, CA -$172 -$41 -$64
Sacramento, CA -$171 -$52 -$69
Buffalo, NY -$166 -$46 -$57
Bronx, NY -$166 -$38 -$89
Santa Cruz, CA -$158 -$39 -$64
Santa Rosa, CA -$157 -$61 -$67
Medford, OR -$156 -$48 -$69
San Francisco, CA -$153 -$34 -$65
Salem, OR -$150 -$47 -$58
Albuquerque, NM -$149 -$52 -$31
Modesto, CA -$141 -$25 -$80
La Crosse, WI -$138 -$36 -$68
Bakersfield, CA -$136 -$26 -$86
Yakima, WA -$135 -$39 -$70
Eugene, OR -$134 -$34 -$59
Santa Barbara, CA -$134 -$59 -$71
Alameda County, CA -$133 -$24 -$57
Syracuse, NY -$131 -$41 -$73
Portland, ME -$130 -$40 -$36
Fresno, CA -$130 -$34 -$83
Burlington, VT -$127 -$38 -$58
San Jose, CA -$126 -$36 -$58
Portland, OR -$126 -$36 -$57
Binghamton, NY -$121 -$45 -$71
Elmira, NY -$117 -$13 -$71
Danville, PA -$115 -$49 -$25
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Minot, ND -$114 -$21 -$42
Albany, GA -$112 -$54 -$62
Olympia, WA -$110 -$33 -$43
Iowa City, IA -$108 -$14 -$52
Honolulu, HI -$108 -$28 -$48
Chico, CA -$104 -$17 -$57
El Paso, TX -$104 -$48 -$7
Redding, CA -$104 -$38 -$45
Dubuque, IA -$103 -$30 -$41
San Bernardino, CA -$102 -$23 -$26
Springfield, MA -$102 -$40 -$12
Pueblo, CO -$101 -$38 -$34
Marshfield, WI -$101 -$10 -$61
San Mateo County, CA -$100 -$28 -$48
Charleston, WV -$100 -$23 -$50
Appleton, WI -$99 -$34 -$49
Albany, NY -$97 -$21 -$57
Roanoke, VA -$96 -$24 -$25
Sayre, PA -$96 -$11 -$58
Madison, WI -$95 -$22 -$37
Bangor, ME -$93 -$20 -$55
Neenah, WI -$93 -$34 -$52
Rochester, MN -$93 -$4 -$51
Napa, CA -$92 -$15 -$80
Providence, RI -$92 -$30 -$16
Rapid City, SD -$91 -$22 -$44
Charlottesville, VA -$91 -$20 -$36
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Everett, WA -$90 -$38 -$47
Bend, OR -$88 -$36 -$42
Winchester, VA -$87 -$18 -$42
Tacoma, WA -$86 -$28 -$36
Grand Junction, CO -$84 -$33 -$24
Muskegon, MI -$83 -$54 -$20
San Luis Obispo, CA -$82 -$42 -$51
Seattle, WA -$80 -$27 -$38
Fargo, ND/Moorhead, MN -$80 -$10 -$35
Contra Costa County, CA -$79 -$11 -$50
Greensboro, NC -$79 -$33 -$35
Morgantown, WV -$76 -$11 -$42
Cedar Rapids, IA -$75 -$14 -$40
Spokane, WA -$73 -$38 -$40
Des Moines, IA -$73 -$5 -$56
Bismarck, ND -$72 -$5 -$60
Erie, PA -$72 -$25 -$26
Anchorage, AK -$72 $6 -$62
Lancaster, PA -$71 -$11 -$22
Columbus, GA -$67 -$36 -$15
Lebanon, NH -$65 -$37 -$22
St. Cloud, MN -$63 -$1 -$45
Green Bay, WI -$63 -$15 -$37
San Diego, CA -$63 -$33 -$28
Grand Rapids, MI -$62 -$21 -$24
Minneapolis, MN -$61 $4 -$43
Salinas, CA -$61 $16 -$57
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Mason City, IA -$59 $8 -$67
Wausau, WI -$59 -$1 -$44
Harrisburg, PA -$58 -$18 -$21
Springfield, MO -$58 -$25 -$21
Kingsport, TN -$57 -$9 -$9
Duluth, MN -$57 -$2 -$35
Augusta, GA -$56 -$25 -$33
Missoula, MT -$56 -$18 -$36
Durham, NC -$56 -$16 -$37
Altoona, PA -$55 -$31 $5
Spartanburg, SC -$54 -$25 -$12
St. Paul, MN -$53 $13 -$47
Hartford, CT -$52 -$24 -$10
Johnstown, PA -$51 -$3 -$6
Norfolk, VA -$51 -$13 -$36
Manhattan, NY -$51 -$10 -$86
Sioux City, IA -$50 $0 -$52
Lynchburg, VA -$50 $0 -$5
Springdale, AR -$48 -$6 $7
Marquette, MI -$45 -$10 -$39
Manchester, NH -$44 -$27 $3
Colorado Springs, CO -$43 -$22 -$8
Newport News, VA -$42 -$22 -$37
Worcester, MA -$42 -$18 $16
Billings, MT -$41 $0 -$45
Reading, PA -$40 -$8 -$6
Arlington, VA -$39 -$12 -$20
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
York, PA -$39 -$16 -$17
Tucson, AZ -$39 -$9 -$20
Tallahassee, FL -$37 -$26 -$10
Ogden, UT -$37 -$61 $25
Boise, ID -$35 -$41 $7
Davenport, IA -$35 $8 -$30
South Bend, IN -$33 -$22 -$7
Sioux Falls, SD -$33 $15 -$43
Kalamazoo, MI -$32 $2 -$16
Reno, NV -$32 -$12 -$21
Allentown, PA -$32 $13 -$14
Phoenix, AZ -$31 $4 -$21
Traverse City, MI -$31 $3 -$40
Huntington, WV -$31 $4 -$31
Urbana, IL -$30 $11 -$38
Fort Wayne, IN -$29 -$20 -$6
New Haven, CT -$29 -$10 -$10
Asheville, NC -$29 -$31 -$11
Richmond, VA -$28 $17 -$22
Scranton, PA -$27 -$15 $14
Macon, GA -$27 $3 -$40
Salt Lake City, UT -$27 -$50 $13
Atlanta, GA -$27 -$20 -$15
Petoskey, MI -$26 -$1 -$29
Waterloo, IA -$26 $2 -$53
Winston-Salem, NC -$26 -$12 -$22
Ventura, CA -$24 -$7 -$45
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Bloomington, IL -$24 $0 -$35
Great Falls, MT -$23 $15 -$36
Columbia, MO -$23 $22 -$34
Greenville, SC -$23 -$20 -$6
Springfield, IL -$22 $15 -$37
Canton, OH -$22 -$10 -$2
White Plains, NY -$17 $16 -$44
Denver, CO -$16 -$20 -$10
Boston, MA -$15 -$9 $31
East Long Island, NY -$15 $12 -$54
Milwaukee, WI -$15 $11 -$20
Bridgeport, CT -$14 $1 -$31
Jonesboro, AR -$14 $6 -$10
Palm Springs/Rancho Mira, CA -$14 -$12 -$43
Paterson, NJ -$14 -$2 -$30
Lansing, MI -$13 $3 -$19
Flint, MI -$13 $26 -$20
Temple, TX -$13 -$25 $27
Hickory, NC -$12 -$22 -$8
Raleigh, NC -$12 $1 -$25
Peoria, IL -$11 $20 -$15
Greenville, NC -$11 $10 -$43
Charlotte, NC -$11 -$15 -$18
Johnson City, TN -$10 $12 $3
Casper, WY -$9 $20 -$24
Florence, SC -$9 $23 -$39
St. Joseph, MI -$9 -$6 -$10
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Fort Smith, AR -$8 -$27 $72
Greeley, CO -$8 $0 -$9
Knoxville, TN -$8 -$18 $1
Fort Collins, CO -$7 -$1 -$8
Grand Forks, ND -$5 $21 -$29
Newark, NJ -$5 $14 -$39
Joplin, MO -$4 $25 -$2
Wilkes-Barre, PA -$4 -$28 $51
Rockford, IL -$3 $27 -$18
Washington, DC -$2 $45 -$48
Wilmington, DE -$1 $21 -$12
Dothan, AL -$1 $5 $18
Chattanooga, TN $0 -$11 $18
Muncie, IN $0 -$21 $9
Rome, GA $1 -$1 $8
Little Rock, AR $2 $12 -$2
Sun City, AZ $3 $10 -$26
Akron, OH $3 $13 $7
Morristown, NJ $4 $5 -$16
Lafayette, IN $4 -$8 $0
St. Louis, MO $6 $26 -$13
Youngstown, OH $7 $29 -$1
Philadelphia, PA $8 $22 -$17
Lawton, OK $8 $3 $37
New Brunswick, NJ $9 $21 -$22
Topeka, KS $10 $1 -$3
Montgomery, AL $10 -$12 $21
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Ridgewood, NJ $10 $13 -$22
Cape Girardeau, MO $10 $3 -$21
Cleveland, OH $11 $14 $20
Idaho Falls, ID $11 -$24 $6
Jackson, TN $12 -$5 $42
Lexington, KY $12 $7 $4
Boulder, CO $12 -$2 $0
Cincinnati, OH $13 $4 $6
Paducah, KY $13 $34 -$5
Memphis, TN $14 $10 $15
Indianapolis, IN $15 -$8 $13
Aurora, IL $15 $26 $11
Toledo, OH $15 $21 $6
Pittsburgh, PA $15 $26 $20
Nashville, TN $15 $2 $21
Columbia, SC $16 -$4 -$10
Owensboro, KY $16 $24 -$24
Oxford, MS $16 $12 $20
Omaha, NE $17 $25 -$17
Ann Arbor, MI $17 $11 $12
Provo, UT $17 -$45 $44
Huntsville, AL $19 $8 -$1
Los Angeles, CA $20 $3 -$12
Columbus, OH $20 $18 $3
Camden, NJ $20 $20 -$17
Dayton, OH $21 $16 $10
Birmingham, AL $22 $12 $23
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Waco, TX $22 -$6 $37
Saginaw, MI $25 $32 -$4
Savannah, GA $25 -$6 -$23
Gainesville, FL $25 $9 $14
Hackensack, NJ $26 $13 -$21
Lincoln, NE $27 $11 -$21
Louisville, KY $27 $19 $13
Charleston, SC $29 -$3 -$4
Covington, KY $30 $48 -$1
Kansas City, MO $30 $16 $9
Tuscaloosa, AL $33 $41 $26
Evansville, IN $34 $8 $23
Mesa, AZ $34 $15 -$6
Salisbury, MD $36 $61 -$28
Ocala, FL $36 -$6 $12
Takoma Park, MD $37 $60 -$42
Pensacola, FL $37 $9 $17
Wichita, KS $39 $18 -$9
Tupelo, MS $40 -$6 $29
Melrose Park, IL $40 $49 $31
Kettering, OH $42 $5 $30
Wilmington, NC $42 -$12 -$19
Ormond Beach, FL $43 -$18 $31
Orange County, CA $44 -$5 $4
Odessa, TX $47 -$16 $80
San Antonio, TX $47 -$20 $63
Dearborn, MI $50 $42 $26
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
New Orleans, LA $52 -$20 $85
Hinsdale, IL $55 $42 $29
Hudson, FL $57 -$5 $42
Lakeland, FL $57 $9 $46
Chicago, IL $59 $51 $63
Mobile, AL $61 $31 $34
Terre Haute, IN $64 $11 -$3
Tampa, FL $65 $13 $44
Detroit, MI $66 $38 $25
Gary, IN $66 $50 $26
San Angelo, TX $67 $16 $55
Abilene, TX $68 $23 $45
Evanston, IL $69 $24 $29
Elyria, OH $69 $51 $28
Orlando, FL $73 $13 $28
Sarasota, FL $74 -$36 $11
Texarkana, AR $75 $1 $94
Pontiac, MI $75 $32 $16
Houma, LA $76 -$5 $54
Blue Island, IL $79 $78 $37
Corpus Christi, TX $85 -$36 $115
Royal Oak, MI $90 $37 $22
Elgin, IL $90 $72 $33
Las Vegas, NV $91 $27 $54
Joliet, IL $92 $85 $15
Fort Myers, FL $93 $1 $10
Lubbock, TX $93 $23 $73
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Bradenton, FL $96 -$10 $32
Tulsa, OK $97 $17 $87
Gulfport, MS $97 $52 $52
Baltimore, MD $98 $135 -$53
Jacksonville, FL $98 $24 $28
Austin, TX $100 -$1 $57
Amarillo, TX $100 $7 $69
Munster, IN $104 $78 $50
Oklahoma City, OK $108 $22 $82
Hattiesburg, MS $108 $17 $60
Longview, TX $109 $3 $101
Panama City, FL $109 $26 $39
Bryan, TX $111 $33 $60
Jackson, MS $115 $5 $110
Wichita Falls, TX $115 -$8 $114
Fort Worth, TX $116 -$7 $113
St. Petersburg, FL $120 $13 $72
Meridian, MS $120 -$4 $125
Clearwater, FL $120 -$13 $81
Harlingen, TX $123 -$34 $157
Beaumont, TX $123 -$5 $102
Slidell, LA $129 $30 $81
Lake Charles, LA $132 $17 $107
Tyler, TX $133 -$2 $90
Victoria, TX $152 $38 $79
Dallas, TX $159 -$3 $140
Metairie, LA $163 $11 $111
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
HRR Name Total Monthly Adjusted Differences from the National Mean of Spending Across HRRs Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs Post-Acute Care Monthly Adjusted Differences from the National Mean of Spending Across HRRs
Fort Lauderdale, FL $172 -$2 $52
Baton Rouge, LA $172 -$12 $140
Shreveport, LA $174 $20 $145
Lafayette, LA $177 $5 $143
Alexandria, LA $180 $41 $134
Houston, TX $189 $23 $120
Monroe, LA $229 $8 $179
McAllen, TX $266 -$23 $255
Miami, FL $435 -$10 $350
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×

image

FIGURE G-1 Input-price-adjusted/total health care spending by hospital referral region (HRR).
NOTE: PHE’s analysis of total health care spending accounts for the commercially insured, Medicare, Medicaid, and the uninsured. HRR regions are divided into five spending quintiles. The figure above illustrates the variation in total health care spending in the United States. Refer to the original subcontractor report for details on methodology, and associated discussion.
SOURCE: PHE, 2013.

Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
Page 151
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
Page 152
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
Page 153
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
Page 157
Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Suggested Citation:"Appendix G: Selected Results of the Committee's Commissioned Empirical Analyses." Institute of Medicine. 2013. Variation in Health Care Spending: Target Decision Making, Not Geography. Washington, DC: The National Academies Press. doi: 10.17226/18393.
×
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Health care in the United States is more expensive than in other developed countries, costing $2.7 trillion in 2011, or 17.9 percent of the national gross domestic product. Increasing costs strain budgets at all levels of government and threaten the solvency of Medicare, the nation's largest health insurer. At the same time, despite advances in biomedical science, medicine, and public health, health care quality remains inconsistent. In fact, underuse, misuse, and overuse of various services often put patients in danger.

Many efforts to improve this situation are focused on Medicare, which mainly pays practitioners on a fee-for-service basis and hospitals on a diagnoses-related group basis, which is a fee for a group of services related to a particular diagnosis. Research has long shown that Medicare spending varies greatly in different regions of the country even when expenditures are adjusted for variation in the costs of doing business, meaning that certain regions have much higher volume and/or intensity of services than others. Further, regions that deliver more services do not appear to achieve better health outcomes than those that deliver less.

Variation in Health Care Spending investigates geographic variation in health care spending and quality for Medicare beneficiaries as well as other populations, and analyzes Medicare payment policies that could encourage high-value care. This report concludes that regional differences in Medicare and commercial health care spending and use are real and persist over time. Furthermore, there is much variation within geographic areas, no matter how broadly or narrowly these areas are defined. The report recommends against adoption of a geographically based value index for Medicare payments, because the majority of health care decisions are made at the provider or health care organization level, not by geographic units. Rather, to promote high value services from all providers, Medicare and Medicaid Services should continue to test payment reforms that offer incentives to providers to share clinical data, coordinate patient care, and assume some financial risk for the care of their patients.

Medicare covers more than 47 million Americans, including 39 million people age 65 and older and 8 million people with disabilities. Medicare payment reform has the potential to improve health, promote efficiency in the U.S. health care system, and reorient competition in the health care market around the value of services rather than the volume of services provided. The recommendations of Variation in Health Care Spending are designed to help Medicare and Medicaid Services encourage providers to efficiently manage the full range of care for their patients, thereby increasing the value of health care in the United States.

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