Unbiased Analysis of Today's Healthcare Issues

Medicare Spending Growth 1992-2010

Written By: Jason Shafrin - Mar• 26•13

In addition to detailed work examining regional variation in Medicare spending between 2007 and 2009, I also conducted a study examining trends in regional variation in Medicare spending and quality between 1992 and 2010. The study was unique because: (i) it covers 19 years of data up to 2010, (ii) the data rely on 100% of Medicare claims between 1992 and 2010, and (iii) the methodology controls for regional differences in prices and case mix using an individual-level risk adjustment model.

The findings that I and co-authors Thomas MaCurdy, Jay Bhattacharya, Camille Chicklis, Kennan Cronen, Jesselyn Friley, Brandy Lipton, Daniel Rogers and Sajid Zaidi reached were the following:

Using the universe of Medicare claims data, from 1992 to 2010, this report examines trends in regional variation Medicare spending, utilization, and quality over this time period. Medicare expenditures grew for 16 of the 18 years between 1992 and 2010, with 2010 expenditures 57.3 percent higher than 1992 expenditures after accounting for inflation. High-cost and low-cost regions show similar patterns of spending growth; further, regions that are high-cost or low-cost in 1992 tend to remain so in 2010. In recent years, there has been a slight regression of region-level spending toward the mean as well as a trend of convergence in recent years. These results hold for the Medicare population as a whole as well as for beneficiaries with chronic obstructive pulmonary disease (COPD), depression, diabetes, or stroke. The quality of health care provided to Medicare beneficiaries has shown little change from 1992 to 2010, and regions that provide a high quality of care in 1992 as measured by admissions or readmissions tend to remain high-quality. Regions with high levels of health care utilization, however, do not necessarily achieve better health outcomes than regions with low levels of health care utilization during this time period.


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