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Geographic Variation in Health Care Spending in the United States Insights From an Institute of Medicine Report

Joseph P. Newhouse, PhD1,2,3; Alan M. Garber, MD, PhD1,2,3,4,5
[+] Author Affiliations
1Department of Health Care Policy, Harvard Medical School, Boston, Massachusetts
2Department of Health Policy and Management, Harvard School of Public Health, Boston, Massachusetts
3Harvard Kennedy School, Cambridge, Massachusetts
4Office of the Provost, Harvard University, Cambridge, Massachusetts
5Department of Economics, Faculty of Arts and Sciences, Harvard University, Cambridge, Massachusetts
JAMA. 2013;310(12):1227-1228. doi:10.1001/jama.2013.278139.
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Geographic variation in per-beneficiary Medicare spending that cannot be explained by wages and the prices of other inputs to health care or by demographic and health characteristics, as described by Dartmouth researchers, has intrigued researchers and stimulated policy debates for years.14 Without evidence that Medicare beneficiaries in high-spending areas have better health outcomes than those in low-spending areas, policy makers have asked whether low-spending areas were being penalized while high-spending areas were being inappropriately rewarded. Wouldn’t it make sense to adopt policies to reduce expenditures in high-cost areas, perhaps by paying physicians and hospitals in those areas less? Could a similar case be made to address geographic variation in private health insurance expenditures?

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