Medicare Battle Heats Up: Geographic Disparities spark look into spending variation

Many experts agree, though, that to get at the underlying cause of disparities, modeling studies like those to be conducted by the IOM will need to consider factors such as a local population’s cost of living, relative health and socioeconomic status.

Dylan Roby, PhD, a research scientist at the University of California at Los Angeles (UCLA) Center for Health Policy Research and assistant professor of health services at the UCLA School of Public Health, said the general expectation among health care analysts is that significant differences will remain even with additional sophisticated modeling techniques.

“The main hypothesis by most people in the field is that it’s differences in practice patterns that are really driving this, not differences in need or differences in disease burden,” Dr. Roby said.

But what about outcomes? A study of heart failure patients at six California hospitals seemed to throw cold water on the notion that higher resource use doesn’t equate with better results for patients (J Am Coll Cardiol. 1999;33(5):1278-1285). The study found that more treatment did lead to higher odds of survival. Whether or not this is true of other procedures has been a huge bone of contention between critics and backers of the atlas.

Dr. Roby said the study’s results lay the framework for looking at hospital-to-hospital differences in how providers deliver care and allocate resources, but he cautions that they shouldn’t be overanalyzed. All six of the California hospitals in the study are linked to universities and have ample access to resources, he pointed out.

The bottom line is that no one yet fully understands all of the factors that account for regional variations in Medicare costs. But the general theme of troubling cost disparities in the U.S. has been bolstered on an international level with the recent release of the Commonwealth Fund’s 2010 ranking of health care in seven developed nations. For the fourth time in a row, the U.S. ranks last in overall performance, including a ranking of sixth in quality and seventh in efficiency, while spending more than twice as much per person than any other country in the survey.

Note: A version of this article originally ran in The Hospitalist, a newsmagazine published by Wiley-Blackwell on behalf of the Society of Hospital Medicine.