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Patients' preferences explain a small but significant share of regional variation in medicare spending.

ABSTRACT: This study assessed the extent to which differences in patients' preferences across geographic areas explained differences in traditional fee-for-service Medicare spending across Dartmouth Atlas of Health Care Hospital Referral Regions (HRRs). Preference measures were based on results of a survey that asked patients questions about their physicians, their own health status, and the care they would want in their last six months of life. We found that patients' preferences explained 5 percent of the variation across HRRs in total Medicare spending. In comparison, supply factors, such as the number of physicians, specialists, and hospital beds, explained 23 percent, and patients' health and income explained 12 percent. We also explored the relative importance of preferences in determining three components of total spending: spending at the end of life, inpatient spending, and spending on physician services. Relative to supply factors, health, and income, patients' preferences explained the largest share of variation in end-of-life spending and the smallest share of variation in spending on physician services. We conclude that variation in preferences contributes to differences across areas in Medicare spending. Medicare policy must consider both supply factors and patients' preferences in deciding how much to accommodate area variation in spending and the extent to which that variation should be subsidized by taxpayers.

SUBMITTER: Baker LC

PROVIDER: S-EPMC4212899 | biostudies-literature | 2014 Jun

REPOSITORIES: biostudies-literature

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Patients' preferences explain a small but significant share of regional variation in medicare spending.

Baker Laurence C LC Bundorf M Kate MK Kessler Daniel P DP

Health affairs (Project Hope) 20140601 6

This study assessed the extent to which differences in patients' preferences across geographic areas explained differences in traditional fee-for-service Medicare spending across Dartmouth Atlas of Health Care Hospital Referral Regions (HRRs). Preference measures were based on results of a survey that asked patients questions about their physicians, their own health status, and the care they would want in their last six months of life. We found that patients' preferences explained 5 percent of t ...[more]

PMID: 24889944

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Project description:BackgroundSources of regional variation in spending for prescription drugs under Medicare Part D are poorly understood, and such variation may reflect differences in health status, use of effective treatments, or selection of branded drugs over lower-cost generics.MethodsWe analyzed 2008 Medicare data for 4.7 million beneficiaries for prescription-drug use and expenditures overall and in three drug categories: angiotensin-converting-enzyme (ACE) inhibitors and angiotensin-receptor blockers (ARBs), 3-hydroxy-3-methylglutaryl coenzyme A (HMG-CoA) reductase inhibitors (statins), and selective serotonin-reuptake inhibitors (SSRIs) and serotonin-norepinephrine reuptake inhibitors (SNRIs). Differences in per capita expenditures across hospital-referral regions (HRRs) were decomposed into annual prescription volume and cost per prescription. The ratio of prescriptions filled as branded drugs to all prescriptions filled was calculated. We adjusted all measures for demographic, socioeconomic, and health-status differences.ResultsMean adjusted per capita pharmaceutical spending ranged from $2,413 in the lowest to $3,008 in the highest quintile of HRRs. Most (75.9%) of that difference was attributable to the cost per prescription ($53 vs. $63). Regional differences in cost per prescription explained 87.5% of expenditure variation for ACE inhibitors and ARBs and 56.3% for statins but only 36.1% for SSRIs and SNRIs. The ratio of branded-drug to total prescriptions, which correlated highly with cost per prescription, ranged across HRRs from 0.24 to 0.45 overall and from 0.24 to 0.55 for ACE inhibitors and ARBs, 0.29 to 0.60 for statins, and 0.15 to 0.51 for SSRIs and SNRIs.ConclusionsRegional variation in Medicare Part D spending results largely from differences in the cost of drugs selected rather than prescription volume. A reduction in branded-drug use in some regions through modification of Part D plan benefits might lower costs without reducing quality of care. (Funded by the National Institute on Aging and others.).

Project description:ImportanceDespite substantial geographic variation in Medicare per beneficiary spending in the US, little is known about the extent to which social determinants of health (SDoH) are associated with this variation.ObjectiveTo determine the associations between SDoH and county-level price-adjusted Medicare per beneficiary spending.Design, setting, and participantsThis cross-sectional study used county-level data on 2017 Medicare fee-for-service (FFS) spending, patient demographic characteristics (eg, age and gender) and clinical risk score, supply of health care resources (eg, number of hospital beds), and SDoH measures (eg, median income and unemployment rate) from multiple sources. Multivariable regressions were used to estimate the association of the variation in spending across quintiles with SDoH.Main outcomes and measures2017 county-level price-adjusted Medicare Parts A and B spending per beneficiary. SDoH measures included socioeconomic position, race/ethnicity, social relationships, and residential and community context.ResultsAmong 3038 counties with 33 495 776 Medicare FFS beneficiaries (18 352 336 [54.8%] women; mean [SD] age, 72 [1.5] years), mean Medicare price-adjusted per beneficiary spending for counties in the highest spending quintile was $3785 (95% CI, $3706-$3862) higher, or 49% higher, than spending for bottom-quintile counties (mean [SD] spending per beneficiary, $11 464 [735] vs $7679 [522]; P < .001). The total contribution (including through both direct and indirect pathways) of SDoH was 37.7% ($1428 of $3785) of this variation, compared with 59.8% ($2265 of $3785) by patient clinical risk, 14.5% ($549 of $3785) by supply of health care resources, and 19.8% ($751 of $3785) by patient demographic characteristics. When all factors were included within the same model, the direct contribution of SDoH was associated with 5.8% of the variation, compared with 4.6% by supply, 4.7% by patient demographic characteristics, and 62.0% by patient clinical risk.Conclusions and relevanceThese findings suggest social determinants of health are associated with considerable proportions of geographic variation in Medicare spending. Policies addressing SDoH for disadvantaged patients in certain regions have the potential to contain health care spending and improve the value of health care; patient SDoH may need to be accounted for in publicly reported physician performance, and in value-based purchasing incentive programs for health care professionals.

Project description:Importance:Hospitalizations for durable left ventricular assist device (LVAD) implants are expensive and increasingly common. Insights into center-level variation in Medicare spending for these hospitalizations are needed to inform value improvement efforts. Objective:To examine center-level variation in Medicare spending for durable LVAD implant hospitalizations and its association with clinical outcomes. Design, Setting, and Participants:Retrospective cohort study of linked Medicare administrative claims and Interagency Registry for Mechanically Assisted Circulatory Support (INTERMACS) clinical data comprising 106 centers in the United States providing durable LVAD implant. Centers were grouped into quartiles based on the mean price-standardized Medicare spending of their patients. The study included Medicare beneficiaries receiving primary durable LVAD implant between January 2008 and December 2014. Data were analyzed between November 2017 and October 2018. Main Outcomes and Measures:Price-standardized Medicare payments and clinical outcomes. Overall and component (facility diagnosis-related group payments, outlier payments, physician services) payments and clinical outcomes (postimplant length of stay and adverse events) were compared across payment quartiles. Results:The study sample included 4442 hospitalized patients, with mean (SD) age of 63.0 (10.8) years, 18.7% female, 27.2% nonwhite, and 6.1% Hispanic ethnicity. Among 4442 hospitalizations, the mean (SD) price-standardized Medicare payment was $176 825 ($60 286) and ranged from $122 953 to $271 472 across 106 centers. The difference in price-standardized payments between lowest and highest spending quartiles was $55 446 ($152 714 vs $208 160; 36%; P < .001), with outlier payments making up most of the difference ($42 742; 77%), followed by DRG ($6929; 13%) and physician services ($5774; 10%). After risk standardization, there was a modest decline in the difference in payments between quartiles ($53 221; 35%), with outlier payments accounting for a larger proportion of the difference (84%). After adjusting for patient characteristics, higher price-standardized payment quartiles were associated with longer postimplant length of stay but were not associated with any adverse events. Conclusions and Relevance:Medicare payments for durable LVAD implant hospitalizations vary widely across centers; this was not well explained by prices or case mix. While associated with longer postimplant length of stay, increased spending was not associated with adverse events. As the supply and demand for durable LVAD therapy continues to rise, identifying opportunities to reduce variation in spending from both explained and unexplained sources will ensure high-value use.

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Patients' preferences explain a small but significant share of regional variation in medicare spending.

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Patients' preferences explain a small but significant share of regional variation in medicare spending.

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