Study finds substantial variations in health care spending at the local level | Agency for Healthcare Research & Quality (AHRQ)

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id="pub-utility-buttons"> <ul id="utility-groups"> <li class="utility content-button"> <a href="#" class=""><span>Table of Contents</span></a> <div class="toc-dropdown"> <div class="arrow-up"></div> <div class="toc-content"> <div><div><ul><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/resactabout.html">About <em>Research Activities</em></a></li><li>Feature Story</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA1.html">AHRQ’s new reports show care quality slowly improving and large disparities in access to care</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA2.html">From the Director</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA3.html">From the Editor</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA4.html">Q & A</a></li><li>Disparities/Minority Health</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA5.html">Perceptions of quality and access among the insured are affected by the uninsured in their community</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA6.html">Low-income blacks are less likely than high-income whites to receive CPR from a bystander</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA7.html">State Spotlight Iowa</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA8.html">Both patient-centered and standard collaborative care approaches improve depression among black patients</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA9.html">Having a patient navigator who spoke Serbo-Croatian helped increase the mammography rate of refugees/immigrants from Bosnia</a></li><li>Health Care Costs and Financing</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA10.html">Rising health care costs reduce employment-based private insurance availability, especially for middle-class families</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA11.html">Study finds substantial variations in health care spending at the local level</a></li><li>Patient Safety and Quality</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA12.html">Automated pharmacovigilance system finds higher rates of side effects than those reported on drug package inserts</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA13.html">Three algorithms are effective in assessing medications likely to have caused adverse drug reactions in intensive care units</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA14.html">Standardized protocol improves the transfer of cardiac surgery patients to intensive care</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA15.html">Hospitals rarely describe urinary tract infections as catheter-associated urinary tract infections when coding claims</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA16.html">Hospital admission codes are useful for identifying cases of pneumonia</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA17.html">Patients have a lower risk of dying in level I trauma centers</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA18.html">Emergency departments score well on quality of care for joint dislocation</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA19.html">Giving flu shots to older emergency department patients is costeffective</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA20.html">Certain medical conditions and Medicaid insurance predict hospital readmission for congestive heart failure</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA21.html">Pharmacy and coded-diagnosis information do not accurately predict tuberculosis cases in patients with rhematoid arthritis</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA22.html">Clinical Cases</a></li><li>Primary Care</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA23.html">Reminder stickers can boost screening for hepatitis C virus in primary care clinics</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA24.html">Providers are missing opportunities to show empathy for their patients</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA25.html">Study finds primary care providers are willing partners in long-term followup care of survivors of pediatric cancer</a></li><li>Mental Health</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA26.html">Use of second-generation antipsychotics to treat off-label conditions rises significantly among Medicaid-enrolled children</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA27.html">Fluoxetine and venlafaxine are effective treatments for depression</a></li><li>Health Information Technology</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA28.html">Electronic health record quality strategies may improve outpatient care for patients with coronary artery disease</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA29.html">Over time nurses become more satisfied with computerized provider order entry (CPOE)</a></li><li>Comparative Effectiveness Research</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA30.html">Urgent need for more research on child maltreatment</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA31.html">Some treatments for otitis media with effusion improve hearing in the short term</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA32.html">Migraine drugs generally effective, but carry side effects</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA33.html">Epoetin and darbepoetin reduce need for transfusions in cancer patients with anemia, but boost risk of blood clots</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA34.html">New report examines interventions to improve cardiovascular disease risk factors among those with serious mental illness</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA35.html">More research needed for pulmonary arterial hypertension screening, management, and treatment</a></li><li>Women’s Health</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA36.html">Two simple questions can help avoid prescribing of teratogenic drugs to pregnant or soon-to-be pregnant women</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA37.html">Pregnant women identify benefits of combining computerized and in-person screening for domestic violence</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA38.html">Postpartum depression screening improves some maternal outcomes</a></li><li>Elderly Health/Long-Term Care</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA39.html">Study traces effects of patent expiration on infused chemotherapy use in the elderly</a></li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA40.html">Combination chemotherapy increases the risk for adverse events in elderly patients with colorectal cancer</a></li><li>AHRQ Stats</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA41.html">AHRQ Stats</a></li><li>News and Notes</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA42.html">News and Notes</a></li><li>Research Briefs</li><li><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/0613RA43.html">Research Briefs</a></li></ul></div></div> </div> </div> </li> <li class="utility download-button"><a href="#"><span>Download</span></a><div class="dl-dropdown"><div class="arrow-up"></div><div class="dl-content"><ul><li> <span><a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/13jun/June2013_RA.pdf">RA 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id="pub-buttons"> <li id="all-pubs-button"><a href="https://web.archive.org/web/20150326133953/http://ahrqpubs.ahrq.gov/">Go to Online Store</a></li> </ul> </aside>  <h1>Study finds substantial variations in health care spending at the local level</h1> <h2>Health Care Costs and Financing</h2> <div id="basic-modal"> <p>Mounting evidence shows wide geographic variations in health care spending not explained by patient characteristics. Some policymakers would like to see high-spending areas subjected to lower Medicare payments and other coverage limitations. A new study illuminates local health care spending patterns. It found substantial variations in health care spending at the local level. </p><p>The researchers analyzed data on enrollment, pharmacy claims, and medical claims from a 5 percent random sample of Medicare beneficiaries. Each beneficiary was assigned to 1 of the 306 hospital referral regions (HRRs) in the United States. These are areas served by large tertiary care hospitals. Each beneficiary was further assigned to 1 of 3,436 hospital service areas (HSAs), which are located within HRRs. HSAs nest within HRRs and HSAs are smaller, local areas where residents use the community hospitals near them to receive most of their care. </p><p>The researchers found substantial local variation in the use and spending for drugs and medical services in HRRs, including differences among HSAs within HRRs. Manhattan, NY, an HRR, had the highest drug spending, while Albuquerque, NM, another HRR, had the lowest. However, within Manhattan, the lowest spending HSA had lower spending than 25 percent of the HSAs in Albuquerque. Thus, many of the low-spending HSAs were situated in high-spending HRRs. Conversely, many of the high-spending HSAs were found in low-spending HRRs. </p><p>In the case of drug spending, a little over half of the HSAs located within the highest-spending HRR quintile were in the highest-spending quintile of HSAs. Of the HSAs in the lowest-spending HRR quintile, 50.3 percent were in the lowest-spending HSA quintile. A similar pattern was found for non-drug medical spending. According to the researchers, policies aimed at HRRs may be too broad to promote wise health care spending and the best use of resources. </p><p>The study was supported in part by AHRQ (HS18657). See "Comparing local and regional variation in health care spending," by Yuting Zhang, Ph.D., Seo Hyon Baik, Ph.D., A. Mark Fendrick, M.D., and Katherine Baicker, Ph.D., in the November 1, 2012, <em>New England Journal of Medicine</em> 367(18), pp. 1724-1731.</p><p align="right">— <a href="/web/20150326133953/http://www.ahrq.gov/news/newsletters/research-activities/resactabout.html"><em>KB</em></a></p> </div> <div class="current-as-of">Page last reviewed June 2013</div> <div class="citation"> <span>Internet Citation: Study finds substantial variations in health care spending at the local level: Health Care Costs and Financing. June 2013. 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Study finds substantial variations in health care spending at the local level | Agency for Healthcare Research & Quality (AHRQ)