Increased Medicare Expenditures for Physicians' Services

What Are the Causes?

Published in: Inquiry, v. 41, no. 1, Spring 2004, p. 83-94

Posted on RAND.org on January 01, 2004

by Melinda Beeuwkes Buntin, Jose J. Escarce, Dana P. Goldman, Hongjun Kan, Miriam Laugesen, Paul G. Shekelle

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In light of rising expenditures for physicians' services and the scheduled decreases in the amounts Medicare pays for such services, the authors identified the sources of change in the volume and intensity of Medicare physicians' services. The authors found that the per capita volume and intensity of physicians' services used by Medicare beneficiaries increased more than 30% between 1993 and 1998. Our analyses indicated that, at most, half of this increase was due to measurable changes in the demographic composition, places of residence, prevalence of health conditions, and managed care enrollment of beneficiaries. The other half was due to a general increase in the use of care across beneficiary categories.

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