Geographic variation in medicare per capita spending.

Abstract

Persistent, widespread variations in Medicare spending across the country are largely and well-documented. In 1996, Medicare per capita spending across the country ranged from $3,000 to $8,500. This synthesis examines the Medicare spending variation, underlying causes, possible solutions, and whether people in higher-spending areas receive better care. Key findings include: Only 10 percent of the Medicare regions had spending within 10 percent of the average. The variation is seen across all Medicare services. Most studies suggest that less than half of the spending variation is accounted for by differences in population characteristics and price. More than half of the spending variation is attributable to differences in use of services. Although research is limited, there is no evidence that areas spending more money have better outcomes or quality of care. Research suggests it is hard to determine why patterns of care and spending vary so much.