Hospital capacity drives costs

AP/Yahoo News, April 7, 2008

For chronically ill patients in their last two years of life, Medicare spends an average of $59,379 in New Jersey but only $32,523 in North Dakota. The difference is due primarily to patients getting more hospital care, but not necessarily better care, according researchers at Dartmouth Medical School. Vast differences such as this in spending patterns nationally points to why policymakers need to focus on volume when it comes to restraining costs, instead of just on the price of a particular service or on expanding health coverage to the uninsured, researchers say.