CMS has a little know publication, the Medicare & Medicaid Research Review, which contains excellent work. In a recent issue, staff at the CMS Office of the Actuary published research on their model of variation in state level per capita health spending. (MMRR Article) The model is based on data gathered from the period 1991-2009 from a variety of sources, including actual health spending, income levels, demographic, health status and other factors. Much of the article discusses various methodological issues in building these models, as well as alternative approaches to address potential errors. Some of the proxies are limited, for example, health status is based on smoking and obesity rates, and provider supply is based on beds in community hospitals. And there is possible interaction between variables, for example, states with higher incomes likely attract more health care resources. The strongest correlates (it is important to understand that correlation may or may not be explanatory in a causation sense) are personal income per capita and increased use of technology. This finding is consistent with other research. When people have more income, they are inclined to spend more on health care, whether in the strictest sense they need that health care or not. And it has long been argued that medical technology–new drugs, new medical devices, new diagnostics and new procedures like robotic surgery–are a fundamental cause of health spending growth, because they either are completely new and additive treatments or because they replace less-expensive treatments. More community hospital beds were also associated with more spending as was having a higher percent of women of child-bearing age. In most forms of the model, having a high percent of the population over age 65 and having more people who smoke or are overweight are also factors. Percent of people uninsured and HMO penetration did not appear to have a major effect on per capita spending. Somewhat surprisingly, more minority residents was negatively correlated with spending. Because it looks over longer periods of time, the report provides a useful addition to the body of knowledge about geographic variation in health spending.
Variation in State Per Capita Health Expenditures
By Kevin RocheMarch 6, 2014Commentary
✅ Subscribe via Email
About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
Healthy Skeptic Podcast
This is an outstanding report on total global drug spending and trends, with projections out to 2025. It helps you understand this important area of health care, which does much...
June 1, 2021
MedPAC 2019 Report to Congress
June 18, 2019
Another example of over-priced companies trying to find some way to survive in the post-epidemic financial world. Transcarent, which does something, somehow to “access high quality, affordable care” is buying...
March 6, 2023
In an attempt to swiftly revive two floundering health care companies, a PE firm has announced the merger and recapitalization of Revive Health and SwiftMD. You know they are...
January 30, 2023
Investors have not yet learned their lesson, as Pearl Health gathers a new round of $75 million in capital for its business of supporting physicians who want to participate in...
January 30, 2023
Access ACO Care Management Chronic Disease Comparative Effectiveness Consumer Directed Health Consumers Devices Disease Management Drugs EHRs Elder Care End-of-Life Care FDA Financings Genomics Government Health Care Costs Health Care Quality Health Care Reform Health Insurance Health Insurance Exchange HIT HomeCare Hospital Hospital Readmissions Legislation M&A Malpractice Meaningful Use Medicaid Medical Care Medicare Medicare Advantage Mobile Pay For Performance Pharmaceutical Physicians Providers Regulation Repealing Reform Telehealth Telemedicine Wellness and Prevention Workplace
March 19, 2023
Tom Frieden Speaks in the WSJ
A public health expert writes an article for the WSJ which amply demonstrates why Americans…
March 19, 2023
Why Ukraine Matters
Not supporting Ukraine is asking for far worse conflicts in the future.
March 19, 2023
Tim Walz’ Minnesota Sucks
I am in the free state of Florida right now, but my home state is…