How Much is Enough? Efficiency and Medicare Spending in the Last Six Months of Life
40 Pages Posted: 24 May 1999 Last revised: 26 Oct 2022
Date Written: April 1998
In Miami, average inpatient Medicare spending on people in their last six months of life was about double Medicare spending in Minneapolis; average ICU days were nearly four times higher. What are the implications of such differences for the efficiency of health care? In this paper, we used Medicare claims data to document the extent of these variations across 306 hospital referral regions in the U.S. We did not find strong evidence that the spending differences were due to underlying variation in health levels across regions. Nor did we find evidence of any benefits from higher spending levels; regional survival rates following acute conditions like AMI (heart attacks), stroke, and gastrointestinal bleeding were not correlated with more intensive health care spending. Finally, a number of recent studies suggest that people prefer less, rather than more intensive treatment. In sum, our results suggest that (i) regions providing more intensive care are not gaining net health benefits over regions providing less care, and (ii) allocative inefficiency may be present, in that patients are not necessarily matched with the treatment they prefer.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Geography and Racial Health Disparities
By Jonathan S. Skinner, Elliott Fisher, ...
The Self-Employed are Less Likely to Have Health Insurance than Wage Earners. So What?
Insurance and the Utilization of Medical Services
By Jonathan Meer and Harvey S. Rosen
On the Validity of Using Census Geocode Characteristics to Proxy Individual Socioeconomic Characteristics
By Arline T. Geronimus, John Bound, ...
The Distributional Effects of Medicare
By Julie Lee, Mark B. Mcclellan, ...
Are Mental Health Insurance Mandates Effective? Evidence from Suicides
By Jonathan Klick and Sara Markowitz
Does Medicare Benefit the Poor? New Answers to an Old Question
By Louise Sheiner and David M. Cutler