Vast geographic differences found in drug spending under Medicare

Jun 09, 2010

Widespread geographic variations exist in drug spending among Medicare beneficiaries, with some regions spending twice as much as others, according to a University of Pittsburgh Graduate School of Public Health study. Published in the Online First June 9 issue of the New England Journal of Medicine, and the first to explore regional drug spending under Medicare, the study also found that higher spending on drugs was not balanced by lower spending on other medical care services such as hospitalizations and visits to the doctor's office.

"As current reform legislation seeks to address inefficiencies in spending to get costs under control, it is vitally important to look at how spending differs regionally," said the study's lead author, Yuting Zhang, Ph.D., assistant professor of health economics at the University of Pittsburgh Graduate School of Public Health. "One of the key questions is whether Medicare patients who spend more on drugs to control chronic conditions have fewer physician visits and hospitalizations. Without examining drug expenditures, it is impossible to know whether spending in one area may substitute for spending in another."

In the study, Dr. Zhang and her colleagues, Joseph P. Newhouse, Ph.D., and Katherine Baicker, Ph.D., Harvard School of Public Health, calculated average drug and non-drug medical spending in 2007 among 306 hospital-referral regions across the U.S. as defined by previous studies. They controlled for geographic differences in health care prices, population demographics, insurance status and overall health, and they developed maps to illustrate annual drug and total medical spending by Medicare beneficiaries across each hospital-referral region.

The authors found that drug spending accounted for more than 20 percent of total medical spending, but varied substantially. For example, the highest region for drug spending under Medicare was Manhattan, N.Y. ($2,973 annually per beneficiary) and the lowest as Hudson, Fla. ($1,854 annually per beneficiary). Non-drug medical spending also varied widely and was twice as high in the highest-spending regions compared to the lowest.

The authors also found that variations in drug spending were only weakly associated with variations in non-drug medical spending.

"Spending more on drugs didn't clearly result in less spending on other medical services," said Dr. Zhang. "Although there was a weak correlation between the two types of spending, high spending in one area was not offset by low spending in the other. This data gives us valuable insight into the use of health care resources and may help guide public policy related to ."

Explore further: AMA examines economic impact of physicians

Provided by University of Pittsburgh

5 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

Study addresses impact of Medicare Part D on medical spending

Jul 01, 2009

After enrolling in Medicare Part D, seniors who previously had limited or no drug coverage spent more on prescriptions and less on other medical care services such as hospitalizations and visits to the doctor's office, according ...

Higher Medicare spending yields mixed bag for patients

Jan 08, 2008

Many recent studies have found that Medicare spending across the country varies greatly. But despite these spending differences, aggregate health outcomes tend to be the same no matter which region a person lives in. Because ...

Seniors in Medicare's doughnut hole decrease use of meds

Feb 03, 2009

Beneficiaries enrolled in Medicare Part D who reached a gap in health care coverage known as the "doughnut hole" were much less likely to use prescription drugs than those with an employer-based plan, according to a University ...

Recommended for you

AMA examines economic impact of physicians

1 hour ago

(HealthDay)—Physicians who mainly engage in patient care contribute a total of $1.6 trillion in economic output, according to the American Medical Association (AMA)'s Economic Impact Study.

Less-schooled whites lose longevity, study finds

1 hour ago

Barbara Gentry slowly shifts her heavy frame out of a chair and uses a walker to move the dozen feet to a chair not far from the pool table at the Buford Senior Center. Her hair is white and a cough sometimes interrupts her ...

How to keep your fitness goals on track

2 hours ago

(HealthDay)—The New Year's resolutions many made to get fit have stalled by now. And one expert thinks that's because many people set their goals too high.

Suddenly health insurance is not for sale

Apr 18, 2014

(HealthDay)— Darlene Tucker, an independent insurance broker in Scotts Hill, Tenn., says health insurers in her area aren't selling policies year-round anymore.

User comments : 0

More news stories

Less-schooled whites lose longevity, study finds

Barbara Gentry slowly shifts her heavy frame out of a chair and uses a walker to move the dozen feet to a chair not far from the pool table at the Buford Senior Center. Her hair is white and a cough sometimes interrupts her ...

How to keep your fitness goals on track

(HealthDay)—The New Year's resolutions many made to get fit have stalled by now. And one expert thinks that's because many people set their goals too high.

Low tolerance for pain? The reason may be in your genes

Researchers may have identified key genes linked to why some people have a higher tolerance for pain than others, according to a study released today that will be presented at the American Academy of Neurology's 66th Annual ...

AMA examines economic impact of physicians

(HealthDay)—Physicians who mainly engage in patient care contribute a total of $1.6 trillion in economic output, according to the American Medical Association (AMA)'s Economic Impact Study.

Making graphene in your kitchen

Graphene has been touted as a wonder material—the world's thinnest substance, but super-strong. Now scientists say it is so easy to make you could produce some in your kitchen.