Medicare Variation Revisited: Is Something Wrong with McAllen, Texas, or Is Something Wrong with Medicare?

Robert Book / December 14, 2010

Health economists and policy analysts have long known that Medicare spends much more, per patient, in some parts of the country than in others. In fact, the primary project of a large research group at Dartmouth is devoted to analyzing the geographic patters in Medicare spending.

Last year, Atul Gawande brought this phenomenon greater public attention with an article in The New Yorker on medical care in the areas of McAllen and El Paso, two regions in Texas that have superficially similar demographics but vastly different levels of per-patient Medicare spending. However, several recent studies suggest that the regional variation might be the result of Medicare’s payment systems and that privately insured patients experience less variation in treatment levels, perhaps sacrificing quality of care. (more…)