The National Institute of Medicine created a committee to try to answer this question, and their report was just made available today at the National Academies Press website. It is titled "Variation in Health Care Spending." It turns out that it wasn't easy to track down data to answer this question, since Medicare and Medicaid services are provided in the context of a wider commercial health market. But the committee pulled together a lot of data and concluded that:
(1) Geographic variation in spending and utilization is real, and not an artifact reflecting random noise; and
(2) Variation in spending in the commercial insurance market is due mainly to differences in price markups by providers rather than to differences in the utilization of health care services.Overall, then, the committee could not determine anything within the regional differences that could lead to policies that could lower costs in some places without harming the care provided. The lack of conclusiveness of the findings, however, is bound to lead to more research and more policy analysis. The fact that key regional differences really do exist is too striking a finding for this new report to put the issue to rest.
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