Geographic Variation in Medicare Spending

health affairs: 3/6

Researchers continue to study why Medicare spending per beneficiary varies significantly from one part of the country to another.

What’s the issue?
While geographic variation in Medicare spending per beneficiary is itself well documented, the causes of that variation, whether it is appropriate, and what can be done to reduce spending in high-cost areas are less clear. This brief describes the research on geographic variation in Medicare spending and different interpretations of what it suggests for Medicare payment policy.

What’s the background?
Medicare is the largest single payer in the United States, providing health insurance for 52 million elderly and disabled beneficiaries. Three out of four Medicare beneficiaries are in traditional fee-for-service (FFS) Medicare, which covers a wide range of acute and post-acute care services including inpatient and outpatient hospital services, physician visits, stays in skilled nursing facilities, home health care, durable medical equipment, and prescription drugs. The types of services covered by FFS Medicare are essentially the same across the country. Read More