Study period: 08/01/10-07/31/11           

Objectives:
Medicare utilization and spending are known to vary from region to region and have been the subject of extensive analysis. Patterns of use and spending in commercial insurance markets, however, are not as well understood—and even less is known about the relation between Medicare and private spending, and how and why that relationship varies across geographic areas. Using claims data from Medicare and commercial claims data from large employers, this project will examine the factors related to variation in Medicare and private spending across hospital referral regions. The goal is to determine the factors that affect the relation between Medicare and private spending, to enable policymakers to draw broader conclusions about the U.S. health care system.
Specific aims include:

Aim 1: Measure geographic variation in unadjusted and price adjusted commercial health care spending across HRRs, and assess the extent to which variation is explained by differences in prices or differences in utilization.

Aim 2: Estimate the correlation between unadjusted and price adjusted commercial spending and Medicare spending across Hospital Referral Regions (HRRs).

Aim 3: Estimate the association between market factors and our adjusted and unadjusted measures of commercial spending and price.

Findings from these analyses will lead to greater understanding of geographic variation in health care use and spending in both the public and private sectors, and the factors related to that variation.  Understanding more about these factors will enhance policymakers’ ability to develop more effective policies to constrain health spending and align payment incentives across the health system.