Study: State Medicaid spending driven by volume, not cost

A new study of regional difference in Medicaid spending found that increasing access to primary-care doctors could lead to significant Medicaid savings (Source: “Study: Volume, not cost, drives up Medicaid spending,” The Hill, July 7, 2011).

The study, published in the journal Health Affairs, measured how much various states spend, on average, for each Medicaid beneficiary. While other researchers have examined regional differences in Medicare spending, this is the first to analyze Medicaid spending.

It found that the amount of money spent per procedure had less impact on a state’s overall Medicaid spending than volume of services and procedues.

“Several states are using their Medicaid resources in a way that’s helping to reduce the need for more expensive hospital care,” said the study’s lead author Todd Gilmer, a professor of health economics at the University of California, San Diego. “This suggests that there is a great deal of room for innovation in Medicaid."