Medicare spending isn't necessarily the best indicator of how many services beneficiaries are actually using in a particular area, the Medicare Payment Advisory Commission observed in a new report.
MedPAC studies Medicare spending, use of services
The report, Measuring Regional Variation in Service Use, was developed in response to interest from lawmakers and members of the commission who wished to better understand how to compare geographic differences in the use of healthcare services in Medicare.
“Service use” refers to how many services a Medicare beneficiary uses, such as hospital stays or physician visits, and how resource-intensive those services are. For example, X-rays use fewer resources than a CT scan. Not surprisingly, substantial variation exists between high and low per-beneficiary spending areas—a 50% difference between the highest 10% and the lowest 10% of areas.
However, when Medicare spending figures are adjusted to reflect only service use, the difference between high and low spending areas is smaller—about 30%. This indicates that Medicare's highest spending areas don't necessarily use the most services and the most resource-intensive services, according to the report.
MedPAC stressed the report was to inform Congress on this topic, not to make policy recommendations.
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