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Health care in the United States is more expensive than in other
developed countries, costing $2.7 trillion in 2011, or 17.9 percent
of the national gross domestic product. Increasing costs strain
budgets at all levels of government and threaten the solvency of
Medicare, the nation's largest health insurer. At the same time,
despite advances in biomedical science, medicine, and public
health, health care quality remains inconsistent. In fact,
underuse, misuse, and overuse of various services often put
patients in danger. Many efforts to improve this situation are
focused on Medicare, which mainly pays practitioners on a
fee-for-service basis and hospitals on a diagnoses-related group
basis, which is a fee for a group of services related to a
particular diagnosis. Research has long shown that Medicare
spending varies greatly in different regions of the country even
when expenditures are adjusted for variation in the costs of doing
business, meaning that certain regions have much higher volume
and/or intensity of services than others. Further, regions that
deliver more services do not appear to achieve better health
outcomes than those that deliver less. Variation in Health Care
Spending investigates geographic variation in health care spending
and quality for Medicare beneficiaries as well as other
populations, and analyzes Medicare payment policies that could
encourage high-value care. This report concludes that regional
differences in Medicare and commercial health care spending and use
are real and persist over time. Furthermore, there is much
variation within geographic areas, no matter how broadly or
narrowly these areas are defined. The report recommends against
adoption of a geographically based value index for Medicare
payments, because the majority of health care decisions are made at
the provider or health care organization level, not by geographic
units. Rather, to promote high value services from all providers,
Medicare and Medicaid Services should continue to test payment
reforms that offer incentives to providers to share clinical data,
coordinate patient care, and assume some financial risk for the
care of their patients. Medicare covers more than 47 million
Americans, including 39 million people age 65 and older and 8
million people with disabilities. Medicare payment reform has the
potential to improve health, promote efficiency in the U.S. health
care system, and reorient competition in the health care market
around the value of services rather than the volume of services
provided. The recommendations of Variation in Health Care Spending
are designed to help Medicare and Medicaid Services encourage
providers to efficiently manage the full range of care for their
patients, thereby increasing the value of health care in the United
States.
Interim Report of the Committee on Geographic Variation in Health
Care Spending and Promotion of High-Value Health Care: Preliminary
Committee Observations is designed to provide the committee's
preliminary observations for the 113th Congress as it considers
further Medicare reform. This report contains only key preliminary
observations related primarily to the committee's commissioned
analyses of Medicare Parts A (Hospital Insurance program), B
(Supplementary Medical Insurance program) and D (outpatient
prescription drug benefit), complemented by other empirical
investigations. It does not contain any observations related to the
committee's commissioned analyses of the commercial insurer
population, Medicare Advantage, or Medicaid, which will be
presented in the committee's final report after completion of
quality-control activities. This interim report excludes
conclusions or recommendations related to the committee's
consideration of the geographic value index or other payment
reforms designed to promote highvalue care. Additional analyses are
forthcoming, which will influence the committee's deliberations.
These analyses include an exploration of how Medicare Part C
(Medicare Advantage) and commercial spending, utilization, and
quality vary compared with, and possibly are influenced by,
Medicare Parts A and B spending, utilization, and quality. The
committee also is assessing potential biases that may be inherent
to Medicare and commercial claims-based measures of health status.
Based on this new evidence and continued review of the literature,
the committee will confirm the accuracy of the observations
presented in this interim report and develop final conclusions and
recommendations, which will be published in the committee's final
report. Table of Contents Front Matter Interim Report REFERENCES
Appendix A: Glossary Appendix B: Statement of Task
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