Regional Differences in Medicare Costs

According to a report released by the Dartmouth Altas Project, which studies medical resources, Medicare costs vary greatly across the country. 

The study said the differences in spending from one area to another can be blamed on decisions made by individual doctors who are influenced by what medical services are available nearby.
“Technology doesn’t drive the growth in health care spending, people do,” said Dr. Elliott Fisher, the lead study author and a medicine professor at the Dartmouth Institute for Health Policy and Clinical Practice. 
Fisher said physicians are not the only issue, but also questions like whether there’s a local medical health race among local hospitals or whether a community has a single hospital that is more focused on primary care.
Medicare, the health insurance program for people 65 and older, accounts for a huge chunk of medical spending: it’s expected to cost more than $500 billion this year. The program covers about 44 million people.
The Dartmouth Atlas findings, drawn from an analysis of government Medicare data from 1992-2006, suggest great inefficiencies in care in some parts of the country. It also says there is plenty of room for reform if practices in the regions of the country that are less expensive could become the national norm.
That won’t come easy since the country’s medical system frequently rewards expensive practices, the study notes. For example, hospitals lose money if they improve care in a way that reduces admissions. Doctors don’t have a financial incentive to spend time carefully listening to a patient rather than quickly referring them to a specialist.
“There are no financial rewards for collaboration, coordination or conservative practice,” the study said.  

Source: PhysOrg

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