Medicare spending varies geographically due to post-acute care differences: IOM

Differences in the use of post-acute care are largely responsible for variation in Medicare spending across geographic areas, according to a new report issued by the Institute of Medicine (IOM).

Skilled nursing facilities, rehabilitation facilities, long-term care hospitals, hospices and home health services were cited. “If regional variation in post-acute care spending did not exist, Medicare spending variation would fall by 73 percent,” the authors wrote.

The researchers analyzed statistics and accounted for factors such as beneficiary health status and demographics, insurance plans, and healthcare markets, among others. “An overall explanation for geographic variation in spending remains elusive,” they said.

The IOM committee suggested that the Centers for Medicare and Medicaid Services continue to explore payment reforms that encourage healthcare delivery systems to integrate clinically and financially as well as reforms that tie payments to outcomes. The committee recommended against the establishment of a “geographic value index” that would tie Medicare payment rates to the health benefits and service costs in specific regions of the country. Such an index would not likely improve the overall value of healthcare, the committee said, because physician performance varies from individual doctor to doctor.

Lois Bowers

Lois A. Bowers was senior editor of I Advance Senior Care / Long-Term Living from 2013-2015.