More Mysteries in Medicare Spending

Over the years a number of studies have shown puzzling disparities in Medicare spending and reimbursements. Some regions of the country spend much more per beneficiaries than others. Yet, within those regions there are vast differences among providers. That makes it difficult for policymakers to decide how to control spending or make the system most efficient. It seems, for example, that some regions use more of one type of care than another does. Often, there’s a local practice to treat a condition or disease one way while in another area the local practice or convention is different. Also, there isn’t much of a correlation between what Medicare spending in an area and what private insurers pay. You can read some of the news here.

Doctors and hospitals often negotiate prices with commercial insurers. But, Dr. Newhouse said, the traditional Medicare program does not negotiate prices.

In one of the study’s notable insights, Dr. Newhouse said, “we did not find any relation between the quality of care and spending, in either Medicare or the commercial insurance sector.”

Representative Betty McCollum, Democrat of Minnesota, said: “I’m disappointed that this study failed to provide more recommendations to address geographic variation.”