The study, “Following the Money: Factors Associated with the Cost of Treating High-Cost Medicare Beneficiaries,” found that instead, variables such as patient health and type of physician (specialist or primary) affected Medicare costs; healthier patients produced lower costs, while patients seeing a medical specialist generated higher costs.
These results challenge previous studies that found geographical variation in Medicare costs based on the supply of providers. The different results could be attributed to the previous studies’ lack of control of variables, such as patient health, which the current data controlled for. The authors conclude that instead of relying on geographical differences to reduce the expense of high-cost Medicare beneficiaries, leaders should take a more comprehensive approach and look at factors like provider accountability.
The top 25 percent of Medicare beneficiaries are responsible for 85 percent of Medicare spending, which suggests that targeting high-cost Medicare beneficiaries could be the most effective way to minimize losses from treating Medicare patients. “Meaningful efforts to reduce Medicare costs will require policies that specifically address the needs of high-cost beneficiaries,” the authors explained.
Read the full report, “Following the Money: Factors Associated with the Cost of Treating High-Cost Medicare Beneficiaries” (pdf).
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