New Dartmouth study: Health spending still varies greatly

A new report from the Dartmouth Institute for Health Policy and Clinical Practice concludes that health care spending still varies greatly across regions of the country (Source: “Medicare Spending Still Varies Widely by Region,” New York Times, Feb. 25, 2009).

The analysis of Medicare spending was published today in the New England Journal of Medicine. An accompanying research brief  (pdf) also was posted on the Dartmouth Atlas Web site.

It found that in areas where there is a surplus of hospital beds and easy access to sophisticated imaging equipment, doctors typically spend more on their patients. It also underscores the daunting challenges facing any efforts at health reform, which would necessarily require reining in costs.

Although the research shows no overall improvements in health spending, Dartmouth authors say their is reason for optimism. “… a careful look at variations in spending growth and spending patterns among U.S. regions reveals a more optimistic picture. By learning from regions that have attained sustainable growth rates and building on successful models of delivery-system and payment-system reform, we might, with adequate physician leadership, manage to ‘bend the cost curve,’” study authors Elliott S. Fisher, Julie P. Bynum, and Jonathan S. Skinner wrote in their New England Journal of Medicine piece.

The new analysis also includes an Excel spreadsheet of every hospital referral region in the nation. Among the 10 regions in Ohio, The inflation-adjusted total Medicare spending ranged from a high of $9,612 per patient in Elyria to $7,930 per patient in Dayton. The highest spending in the nation was $16,351 per patient in Miami and the lowest was in Honolulu, where $5,311 is spent, on average, per patient. The national average is $8,304 per patient.

The slowest rate of spending growth in Ohio occurred in Cleveland, where the annual growth rate was 2.77 percent between 1992 and 2006. By contrast, the highest growth rate in Ohio was in Canton, where spending grew by 4.54 percent per year over the same time period.

The national average for growth was 3.53 percent. The highest growth rate in the nation was McAllen, Texas, which increased 8.31 percent a year. The lowest growth was in Honolulu, which expanded by just 1.63 percent per year between 1992 and 2006.