The Issue
Prior research on geographic variation in Medicare costs has failed to find any positive association between high spending and better health outcomes. In this Commonwealth Fund–supported study, researchers set out to determine whether there was any relationship between geographic variation in Medicare Part D spending and medication-taking behavior among beneficiaries with diabetes or heart failure.
What the Study Found
The researchers used data from Medicare’s Chronic Condition Data Warehouse for 2006 and 2007. They found striking differences in spending by geographic region, with mean spending in the 10 highest-spending regions almost double that in the lowest-spending areas. All of the 10 lowest-spending areas were located in southern states, and the 10 highest-spending areas were in northern or central states.
While they found no consistent evidence that take-up of evidence-based therapies was related to regional drug spending, the authors did find that beneficiaries in higher-spending areas had significantly more "therapy days"—days when recommended medications were on hand—than beneficiaries in lower-spending areas had. However, higher Part D spending did not translate into lower overall Medicare costs.
Conclusions
In future research, it will be important to determine which regional factors are responsible for differences in medication practices, the authors say. "In particular, it will be important to determine if poor physician communication and care coordination are responsible for the observed differences, as these shortcomings can be alleviated though appropriately designed policy tools including accountable care organizations, medical homes, and provider quality reporting initiatives."