Although critics have focused on geographic variation in spending as evidence of waste in the healthcare system, the American Hospital Association said such variation is unavoidable, and sometimes even a good thing.
Spending variation unavoidable, AHA says
The AHA noted in testimony to the Institute of Medicine's Committee on Geographic Variation in Health Care Spending that such variation is often driven by physicians, not hospitals.
Furthermore, any efforts to cut down on variation through financial incentives could wind up penalizing high-performing systems in high-cost areas, while rewarding low-performing systems in low-cost areas. Contrary to findings from the Dartmouth Atlas Project, a recent study of patients at academic medical centers in California found that organizations that spent the most also had the lowest levels of mortality, the AHA said.
“In short, geographic regions do not provide care; providers do,” said Scott Malaney, president and CEO of Blanchard Valley Health System, Findlay, Ohio, and chairman of the AHA's task force on variation. “To be fair and effective, performance incentives and measures must be provider, not geographically, based.”
Last year the IOM began studying possible causes and solutions to geographic variation through funding made available in the Patient Protection and Affordable Care Act.
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