Geographical Variation in Health Spending Across the US Among Privately Insured Individuals and Enrollees in Medicaid and Medicare
Authors: Cooper Zack , Stiegman Olivia , Ndumele Chima D. , Staiger Becky , Skinner Jonathan 
Published: July 2022

Importance

Little is known about small-area variations in health care spending and utilization across the 3 major funders of health care in the US: Medicare, Medicaid, and private insurers.

Objective

To measure regional health spending and utilization across Medicare, Medicaid, and the privately insured; to observe whether there are regions that are simultaneously low spending for all 3 payers; and to determine what factors are correlated with regional spending and utilization by payer.

Design, Setting, and Participants

Observational cross-sectional analysis of the US health system in 2016 and 2017 for 241 of 306 hospital referral regions (HRRs) and 2 states. Participants include individuals with employer-sponsored coverage from Aetna, Humana, or UnitedHealth; individuals with Medicaid fee-for-service coverage in 2016 and 2017; and individuals with Medicare coverage. The analysis was carried out from January 2020 to May 2022.

Main Outcomes and Measures

Spending per beneficiary and inpatient days per beneficiary by payer and overall.

Results

The data include 25 381 167 individuals with employer-sponsored coverage, 69 891 299 with Medicaid coverage in 2016 and 2017, and 26 711 426 individuals with Medicare fee-for-service coverage. The percentage of enrollees who identified as female was 54.1% in the Medicaid program, 56.2% in the Medicare program, and 50.4% in private insurance. The mean (SD) age was 26.9 (21.8) years for Medicaid and 75.0 (7.9) years for Medicare enrollees; for private insurance enrollees, just age brackets were reported: 18 to 24 years (15.9%), 25 to 34 years (24.2%), 35 to 44 years (21.3%), 45 to 54 years (20.8%), and 55 to 64 years (17.8%). In 2017, the mean (SD) HRR-level spending per beneficiary was $4441 ($710) for private insurance, $10 281 ($1294) for Medicare, and $6127 ($1428) for Medicaid. Across HRRs, the correlation coefficients and 95% CIs were 0.020 (−0.106 to 0.146; P = .76) for private insurance and Medicare spending, 0.213 (0.090 to 0.330; P &lt; .001) for private insurance and Medicaid, and 0.162 (0.037 to 0.282; P &lt; .01) for Medicare and Medicaid. Just 3 HRRs (Boulder, Colorado; Bloomington, Illinois; and Olympia, Washington) were in the lowest spending quintile for all 3 insurance programs; 4 HRRs were in the highest (The Bronx, New York; Manhattan, New York; White Plains, New York; and Dallas, Texas). By contrast, the correlation coefficients and 95% CIs for utilization, measured in hospital days, were 0.465 (0.361 to 0.559; P &lt; .001) for private insurance and Medicare, 0.527 (0.429 to 0.612; P &lt; .001) for private insurance and Medicaid, and 0.278 (0.157 to 0.390; P &lt; .001) for Medicare and Medicaid.

Conclusions and Relevance

These findings suggest that payer-specific factors are correlated with health spending variation among Medicare beneficiaries, Medicaid beneficiaries, and the commercially insured and that payer-specific policies will be necessary to improve efficiency in the US health sector.