Unbiased Analysis of Today's Healthcare Issues

Can HilaryCare end regional variation in healthcare spending?

Written By: Jason Shafrin - Feb• 18•08

Michael Cannon of Cato-at-Liberty cites a study from the Congressional Budget Office (CBO) that it is difficult for centrally planned medical care to eliminate local norms.

“…the centrally budgeted VA system does not display much less geographic variation in spending than is exhibited in the unbudgeted Medicare program . . . . In addition to exhibiting geographic variation in spending, the VA system shows substantial variation in patterns of clinical practice despite the fact that VA’s management tracks providers’ compliance with national guidelines for the treatment of many medical conditions . . . . The implication is that local norms can influence practice patterns, even in a relatively centralized system that places a strong institutional emphasis on adherence to clinical guidelines for care”

Cannon also concludes that pay-for-performance mechanisms may have a similar difficulties eliminating regional variations.

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