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IOM: Geographic Value Index Won't Fix Variation

Cheryl Clark, for HealthLeaders Media, March 25, 2013

The report made five key observations:

  1. That healthcare decision making occurs at the individual practitioner or organizational level, such as within hospitals or physician groups, not at a geographic region level.
  2. Substantial variation in spending and utilization exists within progressively smaller units of analysis.
  3. Quality across conditions and treatments varies widely within hospital referral regions; utilization across conditions is moderately correlated within hospital referral regions.
  4. Although a non-trivial amount of geographic variation can be explained by specific demographic and, potentially, health status variables, a substantial amount of variation remains unexplained.
  5. Hospital Referral Region-level quality is not consistently related to spending or utilization.

Variation is even high within a 20-group physician practice, the report said.

For gastroenterologists within Blue Cross Blue Shield of Massachusetts, "there is almost as much variation in the use of upper gastrointestinal (GI) endoscopy for patients with gastroesophageal reflux disorder seen by a gastroenterologist [a major driver of spending in that specialty] among 20 physicians within a single practice…as exists for all gastroenterologists in the state."

The committee report suggested that if behavior change among practitioners and organizations is desired to reduce variation and incent higher quality care, "payments that target these actors are more likely to trigger behavioral change, because providers will be held directly accountable for the value of healthcare services delivered."


Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.
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