Study questions geographic disparities in medical use

A new study unveiled Friday suggests that one of the main arguments of the healthcare reform debate — that regions of the country currently spending more on medical care without getting better results should emulate low-use areas — may be fundamentally flawed.

The assumption is based on Medicare data but private health insurance plans show no such variations, according to the study by the conservative American Enterprise Institute and the University of Southern California’s Schaeffer Center for Health Policy and Economics. Variations by region are almost three times greater in Medicare than in the private sector, according to the study, because private plans are better managers.

“Studies find that Medicare spending and utilization vary considerably across U.S. regions, leading some to suggest that Medicare should look at relatively ‘low-use’ regions as a model for decreasing costs in ‘high-use’ regions,” write authors Darius Lakdawalla, Tomas Philipson and Dana Goldman. “This policy prescription may be off the mark.”

Instead, the authors write that adopting private-sector practices would “help reduce geographic variation, limit costs, and improve health care outcomes” in Medicare.