Medicare Battle Heats Up: Geographic Disparities spark look into spending variation

Rep. Jay Inslee (D-Wash.), whose district lies northwest of Seattle, served as one of the lead Congressional negotiators on the issue. According to Inslee spokesman Robert Kellar, the geographical disparity in health care spending has been a perennial concern for the Washington delegation due to reimbursement rates that lag by as much as 50 percent, depending on the procedure.

“Hospitals haven’t been able to keep or attract the personnel that they could have because of this issue,” Kellar said.

In Washington state, for example, per capita Medicare reimbursements in 2007 hovered about $1,600 below the national average, though 12 other states, led by Hawaii, received even less, according to Dartmouth Atlas statistics tabulated from Centers for Medicare and Medicaid Services (CMS) data.

Despite the specter of a skirmish among urban and rural states and hospitals, however, the Dartmouth Atlas suggests that many disparities are more geographically nuanced. In 2007, for example, the Miami hospital referral region received nearly $17,300 in Medicare reimbursements per enrollee, while nearby Fort Lauderdale received less than $10,400 and Atlanta less than $7,700. By comparison, New York netted $12,700, Seattle received $7,300, Rochester, Minn., received $7,200 and Honolulu was reimbursed only $5,900.

Specific Procedures

Specific procedures reveal some significant health care trends within individual states. Carotid endarterectomy surgery to prevent stroke, for example, is gradually being replaced by more minimally invasive carotid artery stents. But in Arkansas, carotid endarterectomy procedures defied the national trend, actually rising in prevalence from 1996 to 2005, from 3.6 to 3.8 procedures per 1,000 people. (See map above.) A large part of this trend was due to an increase among women. In Georgia, conversely, rates of carotid endarterectomy, which had been among the nation’s highest, dropped below the national average.

A big question, of course, is whether these trends are necessarily good or bad. An accompanying study by the Dartmouth Institute for Health Policy and Clinical Practice suggests that a decade of data reveals “no general medical consensus regarding the best course of action.” Meanwhile, regional application of the alternative method, carotid stenting, varied by a factor of 30 in 2007. It is this lack of consensus, Dartmouth’s researchers argue, that can drive spending disparities among regions and even among neighboring hospitals. The implication is that much of this variation might be attributable to unnecessary endarterectomy or stenting procedures.

An Unclear Picture

Representatives of higher-spending areas, however, have complained that the atlas doesn’t tell the whole story—that steep living costs, poorer populations seeking medical care and the infrastructure necessary for teaching institutions can drive up Medicare expenses. After The New York Times printed a story in June that was sharply critical about what was and wasn’t included in the atlas’s calculations and conclusions, the Dartmouth researchers hit back with a testy rebuttal, spurring a terse back-and-forth that seemed to invite bloggers and commentators of all stripes to take sides.