Study: Volume, not cost, drives up Medicaid spending

States can achieve significant Medicaid savings by increasing access to primary-care doctors, according to the first-ever study of regional differences in Medicaid spending.

The study, published in the journal Health Affairs, measured how much various states spend, on average, for each Medicaid beneficiary.

It found that high-spending states like New York don't necessarily pay much more for each procedure than their thriftier counterparts. Instead, each patient is likely to receive a larger number of services and procedures.

Other studies have examined geographic disparities in Medicare, but not Medicaid. The results come at a time when Medicaid is is on the chopping block as Congress looks for spending cuts to accompany an increase in the debt ceiling.

States have been able to control their Medicaid spending by boosting access to primary-care doctors, according to the study.

Hospital services are generally more expensive than a visit to the family doctor, and many healthcare experts believe investments in preventive care ultimately save money. Todd Gilmer, a professor of health economics at the University of California, San Diego, is the study's lead author.

“Several states are using their Medicaid resources in a way that’s helping to reduce the need for more expensive hospital care,” Gilmer said in a statement. “This suggests that there is a great deal of room for innovation in Medicaid."

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