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Acute hospital care is the chief driver of regional spending variation in Medicare patients with advanced cancer.

ABSTRACT: The root causes of regional variation in medical spending are poorly understood and vary by clinical condition. To identify drivers of regional spending variation for Medicare patients with advanced cancer, we used linked Surveillance, Epidemiology, and End Results program (SEER)-Medicare data from the period 2004-10. We broke down Medicare spending into thirteen cancer-relevant service categories. We then calculated the contribution of each category to spending and regional spending variation. Acute hospital care was the largest component of spending and the chief driver of regional spending variation, accounting for 48 percent of spending and 67 percent of variation. In contrast, chemotherapy accounted for 16 percent of spending and 10 percent of variation. Hospice care constituted 5 percent of spending. However, variation in hospice spending was fully offset by opposing variation in other categories. Our analysis suggests that the strategy with the greatest potential to improve the value of care for patients with advanced cancer is to reduce reliance on acute hospital care for this patient population.

SUBMITTER: Brooks GA

PROVIDER: S-EPMC4203442 | biostudies-other | 2014 Oct

REPOSITORIES: biostudies-other

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Acute hospital care is the chief driver of regional spending variation in Medicare patients with advanced cancer.

Brooks Gabriel A GA Li Ling L Uno Hajime H Hassett Michael J MJ Landon Bruce E BE Schrag Deborah D

Health affairs (Project Hope) 20141001 10

The root causes of regional variation in medical spending are poorly understood and vary by clinical condition. To identify drivers of regional spending variation for Medicare patients with advanced cancer, we used linked Surveillance, Epidemiology, and End Results program (SEER)-Medicare data from the period 2004-10. We broke down Medicare spending into thirteen cancer-relevant service categories. We then calculated the contribution of each category to spending and regional spending variation. ...[more]

PMID: 25288424

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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.).

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Acute hospital care is the chief driver of regional spending variation in Medicare patients with advanced cancer.

Publications

Acute hospital care is the chief driver of regional spending variation in Medicare patients with advanced cancer.

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