Featured Research

from universities, journals, and other organizations

Regional analysis masks substantial local variation in health care spending

Date:
October 31, 2012
Source:
University of Pittsburgh Schools of the Health Sciences
Summary:
Reforming U.S. Medicare payments based on large geographic regions may be too bluntly targeted to promote the best use of health care resources, a new analysis suggests.

Reforming Medicare payments based on large geographic regions may be too bluntly targeted to promote the best use of health care resources, a new analysis from the University of Pittsburgh Graduate School of Public Health suggests.

The analysis will be published in the Nov. 1 issue of the New England Journal of Medicine.

"Much policy attention has been drawn to the large geographic variation in health care spending across regions, and for good reason -- because regional variation points to inefficient use of resources," said lead author Yuting Zhang, Ph.D., associate professor of health economics at Pitt Public Health. "But it is important to effectively target these policies to reduce overutilization while maintaining access to high-quality care."

Policies that are too widely focused, such as at the larger regional level, could leave many high-spending locales untouched while inadvertently penalizing some low-spending locales. However, policies that are too finely focused, such as at the physician-level, could miss system-level factors that account for high utilization in some areas, Dr. Zhang said.

Previous geographic variation analyses primarily focused on regional areas, such as the hospital referral regions (HRRs) described in the Dartmouth Atlas of Health Care. The United States can be divided into 306 HRRs, which are areas served by large tertiary hospitals where patients are referred for major cardiovascular surgical procedures and for neurosurgery.

The HRRs can be further divided into 3,436 Dartmouth hospital-service areas (HSAs), where residents receive most of their hospital care from the hospitals in the area.

Dr. Zhang and her colleagues used enrollment, pharmacy claims and medical claims data from 2006 through 2009 from the Centers for Medicare and Medicaid Services for a 5 percent random sample of Medicare beneficiaries enrolled in stand-alone Part D plans. The study sample included about 1 million beneficiaries each year.

"We found substantial misalignment of high-spending HSAs and HRRs, after adjusting for population difference across regions," Dr. Zhang said. "Many low-spending HSAs are located within high-spending HRRs, and many high-spending HSAs are located within low-spending HRRs."

Only about half of the HSAs located within the highest-spending fifth of HRRs are themselves in the highest spending fifth of HSAs. Conversely, only about half of the highest-spending fifth of HSAs were located within the highest-spending fifth of HRRs.

For example, Manhattan was one of the HRRs with the highest drug spending in the nation, while Albuquerque was one of the lowest, after adjusting for population difference in the regions. However, the lowest-spending HSA in Manhattan had lower spending than about a quarter of the HSAs within Albuquerque.

"If a reform policy targeted the Manhattan HRR for lower Medicare payments, it would penalize low-spending local hospitals while missing the higher-spending local hospitals within the Manhattan HRR," Dr. Zhang said.

Using their analysis, Dr. Zhang and her colleagues could not determine the "right" level to target policy reforms, but suggest that focusing exclusively on the regional level is too blunt.

The study was funded by the Institute of Medicine grant no. HHSP22320042509X, National Institute of Mental Health grant no. RC1 MH088510 and the Agency for Healthcare Research and Quality grant no. R01 HS018657.

Co-authors include Seo Hyon Baik, Ph.D., of GSPH's Department of Health Policy and Management; A. Mark Fendrick, M.D., of the University of Michigan School of Medicine; and Katherine Baicker, Ph.D., of the Harvard University School of Public Health.


Story Source:

The above story is based on materials provided by University of Pittsburgh Schools of the Health Sciences. Note: Materials may be edited for content and length.


Journal Reference:

  1. Yuting Zhang, Seo Hyon Baik, A. Mark Fendrick, Katherine Baicker. Comparing Local and Regional Variation in Health Care Spending. New England Journal of Medicine, 2012; 367 (18): 1724 DOI: 10.1056/NEJMsa1203980

Cite This Page:

University of Pittsburgh Schools of the Health Sciences. "Regional analysis masks substantial local variation in health care spending." ScienceDaily. ScienceDaily, 31 October 2012. <www.sciencedaily.com/releases/2012/10/121031214134.htm>.
University of Pittsburgh Schools of the Health Sciences. (2012, October 31). Regional analysis masks substantial local variation in health care spending. ScienceDaily. Retrieved August 20, 2014 from www.sciencedaily.com/releases/2012/10/121031214134.htm
University of Pittsburgh Schools of the Health Sciences. "Regional analysis masks substantial local variation in health care spending." ScienceDaily. www.sciencedaily.com/releases/2012/10/121031214134.htm (accessed August 20, 2014).

Share This




More Health & Medicine News

Wednesday, August 20, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Ebola-Hit Sierra Leone's Freetown a City on Edge

Ebola-Hit Sierra Leone's Freetown a City on Edge

AFP (Aug. 19, 2014) Residents of Sierra Leone's capital voice their fears as the Ebola virus sweeps through west Africa. Duration: 00:56 Video provided by AFP
Powered by NewsLook.com
101-Year-Old Working Man Has All The Advice You Need

101-Year-Old Working Man Has All The Advice You Need

Newsy (Aug. 19, 2014) Herman Goldman has worked at the same lighting store for almost 75 years. Find out his secrets to a happy, productive life. Video provided by Newsy
Powered by NewsLook.com
Researcher Testing on-Field Concussion Scanners

Researcher Testing on-Field Concussion Scanners

AP (Aug. 19, 2014) Four Texas high school football programs are trying out an experimental system designed to diagnose concussions on the field. The technology is in response to growing concern over head trauma in America's most watched sport. (Aug. 19) Video provided by AP
Powered by NewsLook.com
American Ebola Patient Apparently Improving, Outbreak Is Not

American Ebola Patient Apparently Improving, Outbreak Is Not

Newsy (Aug. 19, 2014) Nancy Writebol, an American missionary who contracted Ebola, is apparently getting better, according to her husband. The outbreak, however, is not. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins