Is the disparity among different geographic regions with respect to Medicare spending a sign of inefficiency and waste? Is it really true that in certain regions of higher Medicare utilization and spending than in others, patients have a higher percentage of diagnoses whose services are reimbursable on some level?

In a study in this week’s NEJM, this seems to be the case [PDF]. A political football of sorts, some U.S. lawmakers are fighting to eliminate such disparities. As they stand, different systems of acute care may be reimbursed for in a wildly random fashion while offering roughly the same services and treatments. How do policymakers adjust for these wide-ranging differences?

By the end of the study, beneficiaries who had moved to quintile 5 regions (those with the highest intensity of practice) had risk scores that were, on average, 19% higher than those of beneficiaries who had moved to quintile 1 regions (those with the lowest intensity of practice).

With results like these, how do policymakers adjust for these wide-ranging differences to narrow such spending disparities? It’s a good study which details how far President Obama’s call for streamlined healthcare spending needs to go to establish non-biased reimbursement schemes for providers who continue to participate in a program (Medicare) which is constantly becoming more unsustainable.

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