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Regional analysis masks substantial local variation in health care spending
Date:10/31/2012

ample 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.


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Contact: Allison Hydzik & Cyndy McGrath
HydzikAM@upmc.edu
412-647-9975
University of Pittsburgh Schools of the Health Sciences
Source:Eurekalert

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