Cover: Hospital and Regional Variation in Medicare Payment for Inpatient Episodes of Care

Hospital and Regional Variation in Medicare Payment for Inpatient Episodes of Care

Published in: JAMA Internal Medicine, v. 175, no. 6, June 2015, p. 1056-1057

Posted on rand.org Apr 22, 2015

by Peter S. Hussey, Peter J. Huckfeldt, Samuel Hirshman, Ateev Mehrotra

Health care spending varies widely between geographic regions, but there is disagreement regarding the appropriate policy response. Regional policies include reducing Medicare payment rates in high-spending regions, limiting the supply of health care facilities using certificate-of-need criteria, and implementing care-improvement collaboratives. The Institute of Medicine opposed regional policies in favor of hospital- and health care professional-focused policies, such as bundled payments, accountable-care organizations, and value-based payments. Their concern was that substantial variation in Medicare spending occurs within geographic regions and high-performing hospitals and health care professionals in low-performing regions would be unfairly penalized by regional policies. To further inform this debate, we compared the amount of spending variation that occurs between regions vs between hospitals.

This report is part of the RAND external publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.