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Dartmouth Revises Medicare Spending Variation Report

Cheryl Clark, for HealthLeaders Media, June 24, 2011

There is the factor of "reverse causation," which is the phenomenon by which Medicare beneficiaries who move from low intensity spending and healthcare utilization to areas of higher spending end up with additional diagnoses "so much so that their HCC (hierarchical condition categories) codes would predict 19% higher spending per patient than for their counterparts who moved to low intensity hospital referral regions.

"Thus there are biases in using HCC-based adjustments that tend to artificially diminish true geographic variation in both spending and risk-adjusted mortality" that can be seen most graphically in McAllen, TX.

By the looks of it, it is one of the most expensive healthcare areas in the country and should be deemed to have a population that is the sickest.

"Yet the 2007 age, sex and race-adjusted mortality rate for McAllen in the Medicare population (4.28 per 100 beneficiaries) was well below the national average (4.82) and even below the mortality rate in Provo, Utah (4.67)."

The summary concludes that clearly, some regions of the country are less healthy than others, and the Dartmouth Atlas Project's findings "are likely to overstate spending in unhealthy regions and understate spending in healthy regions."

That's why the team is developing new measures "based on cohorts of Medicare beneficiaries who have had a hip fracture or heart attack in order to compare, for example, how hip fracture patients are treated in Minneapolis compared to those in New York."


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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1 comments on "Dartmouth Revises Medicare Spending Variation Report"


Rob Forster MD (6/28/2011 at 12:12 PM)
Having been a healthcare plan executive in Florida for near 10 years gave me time to study Miami. Those who live there >65 are healthier than average and both unit cost and utilization of services are higher than average No. Florida seniors. Unit cost are stratospheric[INVALID]Historical high FFS Medicare drove the current base for payment and reform never occured. In the private sector $5000-7,000/day in the University of Miami is not unusual in their contracts for acute medical beds. That is 3-5X the national norm. Seniors who are visiting So. Florida and fall ill are typically very sick and heavy over utilization of services is the standard.