Implications of Regional Differences in Spending

Howard A. Levin

doi:10.7326/0003-4819-140-2-200401200-00020

Letters |20 January 2004

Implications of Regional Differences in Spending

Howard A. Levin, MD

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TO THE EDITOR:

The prospect of a 30% decrease in Medicare costs with no degradation in health outcomes is already a powerful incentive for hard-strapped government officials to act. However, as startling as the estimates of saving to the system are, it is possible that this is an underestimate. In the articles by Fisher and colleagues (1, 2), the lowest quintile is assumed to be the benchmark, but this may not be the case. The End-of-Life Expenditure Index includes a highly heterogeneous case mix with many diagnoses and treatment courses. A hospital referral region with overall lower costs might not have low resource consumption for some specific medical problems. Fisher and colleagues did not include the ranges for the quintiles and particularly the range for the lowest quintile. A large range would suggest that the lowest quintile does not represent what could be the benchmark or most efficient practice style and would raise the possibility that savings in excess of 30% are possible. Further studies would be needed to confirm whether outcomes were affected at these lower levels of spending. However, the possibility of even greater savings will increase the pressure to solve the financing problem for Medicare.

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2004 American College of Physicians

Letters |20 January 2004

Implications of Regional Differences in Spending

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Letters |20 January 2004

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