Dartmouth Revises Medicare Spending Variation Report

According to an article in the New York Times June 2, 2010, "the maps made reform seem relatively easy to many in Congress, some of whom demanded the administration simply trim the money Medicare pays to hospitals and doctors in the (more expensive) zones. The administration promised to seriously consider doing just that."

The new tables, which look at just Medicare spending for 2003 to 2008, use relative value units to measure cost of labor to reflect the fact that it's more expensive overall to provide medical care in New York City than it is in, say, Fargo, North Dakota.

The Dartmouth team's new tables also reflect the removal of differences in reimbursement rates that allow Medicare to pay hospitals with medical and surgical residency training programs more than hospitals that don't have those academic functions. They also leave out higher payments to hospitals that serve a high percentage of low-income patients, called DSH or disproportionate share adjustments.

The major spending anomalies or outliers, Miami and McAllen, TX, which became synonymous with enormous Medicare spending during the healthcare reform debate of 2009, continue to maintain their first and second places in healthcare spending.

But major shifts were seen in New York City, Skinner said. Bronx and Manhattan, which were fourth and fifth highest out of 306 areas in the country in Medicare spending in the original report, dropped so much that they are no longer considered outliers.

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