CMS Data Drop Shows Regional Spending Variations
By Christine Kern, contributing writer
The latest data from CMS reveals regional variations in spending on inpatient and post-acute care.
The latest release of CMS data documenting per capita spending for Medicare beneficiaries demonstrates that states – particularly those in the South, Midwest, and Mid-Atlantic – are spending significantly more on inpatient and post-acute care than their northern and western neighbors.
According to Modern Healthcare, despite controversy over whether these wholesale prices are relevant to consumers, since they typically pay either negotiated insurance rates or receive financial assistance, price transparency experts say the state-level data can be instructive. Robin Gelburd, president of FAIR Health stated, “It's exciting that we're all having this national conversation about cost. It's like we're in a living laboratory as we speak. ” FAIR Health is a not-for-profit organization that compiles a national database of healthcare claims.
According to the CMS' data, the government spent an average of $8,973 per Medicare beneficiary in 2012. Highest total per capita costs were found in Louisiana (26 percent above average), Texas and Florida (both 20 percent above average), while the lowest costs were in Wisconsin (14 percent below average) and Utah (10 percent).
For inpatient care, the country’s highest spending was on Michigan beneficiaries at 13 percent above average, while it was 15 percent below average in Wyoming. The greatest differences were found in post-acute care. In Louisiana, total per capita costs for post-acute services were 74 percent above the national average while in Mississippi they were 14 percent below average.
Experts say that there are a number of factors that can contribute to geographical variations in per capita spending, including differences in where beneficiaries get care, technology, medical protocols, concentration of providers, and cost of living.
Lifestyle and socioeconomic differences could also explain why some states are spending significantly more than others as their resident’s age, Gelburd said. While the CMS did not adjust the data for differences in beneficiaries' health status, the agency did attempt to control for other factors, such as higher payments tied to local wages and compensating hospitals for the cost of training doctors.
Separately, the CMS' release of the 2012 chargemaster data continued to show wide variation not just across the country but from hospital to hospital. It also renewed the debate around whether and how consumers can use this information to make decisions about where to get treatment.
Hospitals, meanwhile, continue to insist that the charges are only a wholesale price, the jumping off point for negotiation. It's unclear, though, whether the release of the data is prompting hospitals to adjust those prices now that they're available for public consumption.