Durable Medical Equipment And Home Health Among The Largest Contributors To Area Variations In Use Of Medicare Services

Abstract

Most analyses of geographic variation in Medicare spending have focused on total spending. However, focusing on the volume and intensity of specific categories of services delivered to patients could help identify ways to lower costs without having a negative impact on care. We investigated how utilization in thirteen medical service categories in Medicare Parts A and B (for hospital and physician insurance, respectively) varied across sixty communities nationwide. We found considerable geographic variation in the use of some service categories, although not all. We also found that local communities used very different combinations of types of services to produce medical care, that some service categories were substituted for others, and that the mix of service categories differed even among sites with high or low total medical utilization levels. Home health and durable medical equipment were major drivers of total geographic service use variation because of their variation across sites. They may therefore be appropriate targets for policy interventions directed at increasing efficiency.

Acute Hospital Care Is The Chief Driver Of Regional Spending Variation In Medicare Patients With Advanced Cancer

“…In contrast to prior studies,[5,17] we analyzed spending variation for hospice services separately from other postacute care services. While postacute facility care, home health, and durable medical equipment were confirmed as drivers of regional spending variation, variation in the use of hospice care demonstrated the opposite association, actually offsetting total spending variation.…”

“…Using health care service categories similar to those in our study, James D. Reschovsky and colleagues found that home health services and durable medical equipment were the leading drivers of regional variation in the general Medicare population. [5] Acute hospital care accounted for 40 percent of total spending but was not found to be a driver of regional variation. The Institute of Medicine (IOM) recently assessed the contribution of seven distinct service categories to regional spending variation among Medicare recipients.…”

“…[5] When applied to a clinically well-defined population of patients, such as patients with advanced cancer, this approach offers the potential to identify specific clinical and policy approaches with the potential to improve the quality and efficiency of care.…”

For-Profit Medicare Home Health Agencies’ Costs Appear Higher And Quality Appears Lower Compared To Nonprofit Agencies

“…11 Home health is a major driver of geographical variation in the use of Medicare services. 12 The January 24, 2013, settlement agreement in Jimmo v. Sebelius 13 is likely to expand eligibility for Medicare-paid home health services and may presage further cost increases. 14 Investor ownership of home health agencies has grown rapidly, with for-profits accounting for 62 percent of all agencies in 2010.…”

Costs and Clinical Quality Among Medicare Beneficiaries: Associations with Health Center Penetration of Low-Income Residents

“…Geographic variations in health care costs and clinical quality, particularly within the Medicare program, have long been of interest to health care providers, policy makers, and payers, beginning with foundational research by Wennberg and colleagues (Burney, Schieber, Blaxall, & Gabel, 1978;Cromley & Shannon, 1988;Escarce, 1991;Hirth, Tedeschi, & Wheeler 2001;Keating, Landrum, Lamont, Bozeman, & McNeil, 2012;O'Hare, Rodriguez, Hailpern, Larson, & Kurella Tamura, 2010;Reschovsky, Ghosh, Stewart, & Chollet, 2012;Wennberg, 1996;Wennberg & Cooper 1999;Wennberg & Gittelsohn, 1973;Wennberg & Gittelsohn, 1982;Zhang, Baicker, & Newhouse, 2010a, 2010b. The existence of variations in spending across the United States (U.S.) suggests opportunities for gains in efficiency and cost savings.…”