Population health drives Medicare spending variation

More ailing joints, hearts and other chronic medical conditions may be to blame for higher spending by Medicare in some communities compared with others, new research suggests.

The study, published by the journal Health Services Research, analyzed Medicare spending across 60 communities for two acute conditions and eight chronic conditions, including heart disease, diabetes and joint degeneration in the knee, lower leg, neck or back.

What Medicare spends from one city to the next across the U.S. is one of the thornier and more pressing issues in the national debate over how to slow health spending—and ease pressure on household, employer and public budgets. Previous research, notably by Dartmouth University researchers, has suggested that Medicare spending varies because doctors practice medicine differently (and not always well) across the country, and financial incentives encourage overuse of healthcare.

The latest volley suggests that nearly all communities are a mix of high- and low-cost spending. But communities with the highest overall costs across 10 conditions had a greater prevalence of most of those diseases than the lowest-cost communities. Seniors in high-cost locations were also more likely to have multiple conditions than those in low-cost locales.

The study sought to address the possibility that diseases may appear more prevalent in some communities because doctors are quicker to diagnose and treat them. Researchers analyzed whether locations with higher rates of diseases also had a lower cost per episode of care because early diagnosis caught them before they grew more complex, acute and costly to treat. Except for cataracts, that was not the case, the authors wrote.

James Reschovsky, one of the authors, said the results indicate people in high-spending spots are “just sicker.”

That was also the finding of a paper Reschovsky and colleagues published in May in the journal Medical Care Research and Review, which found population health accounted for roughly three-quarters of the difference between the highest and lowest U.S. regions. A Dartmouth health economist challenged the results of the May paper and said results could not be replicated.

The paper did not discount the influence that doctors have over spending and healthcare use. In areas where the average cost of treating an episode for certain conditions was high, so too were the rates of hospitalization, surgery and, “to a lesser degree,” specialist involvement.

Follow Melanie Evans on Twitter: @MHmevans