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Issue 6: July 2004

Geographic Variation in Medicare Per Capita Spending: Should Policy-Makers Be Concerned?

In contrast to the uniformity of benefits and eligibility, Medicare spending varies geographically. This leads to the sense that some providers and beneficiaries "win"—receiving more services, higher revenues, better benefits—and some "lose." Concern over these disparities has fueled Medicare policy debates. This synthesis analyzes reasons for geographic variation in Medicare spending per capita, identifies what factors—including differences in population characteristics, prices and patterns of care—account for these variations, and discusses the policy implications of the findings.

Some Key Questions Addressed in This Issue:

  • Does Medicare spending vary geographically?
  • How much of the variation is due to differences in population mix and prices across areas?
  • What explains the remaining variation?
  • Do people in higher spending areas get better care?

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