Lubbock Beats McAllen For Medicare Cost Crown : Shots - Health News A highly anticipated report shows persistent regional variation in Medicare spending. But the new rankings shake up some assumptions about where care is most expensive, after factoring in costs of living and differences in payment rates.
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Lubbock Beats McAllen For Medicare Cost Crown

Move over McAllen, Texas. When it comes to Medicare spending, you've been ousted by Lubbock.

Everything, including Medicare spending, is big in Texas. hide caption

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Everything, including Medicare spending, is big in Texas.

McAllen, a Texas border town, was thrust into the national spotlight after a New Yorker article by surgeon Atul Gawande showed in June that it had the highest Medicare spending per beneficiary next to fraud-plagued Miami, based on data compiled by Dartmouth researchers.

But a highly anticipated report just out from an independent agency that oversees Medicare measured the program's spending differently, and it knocks McAllen to number 14 out of 403 locales, behind three other Texas cities, including Lubbock, and parts of Louisiana and Oklahoma.

How come? The new analysis, from the Medicare Payment Advisory Commission, or MedPAC, factors in higher costs of living and different payment rates for rural or urban areas.

Research on health spending at Dartmouth has been highly influential for its conclusion that some areas of the country spend much more than others to treat Medicare patients --indicating that there may be large quantities of unnecessary procedures or waste.

Both MedPAC and Dartmouth took into account how sick patients were. The MedPAC analysis finds less variation but echoes the conclusion that significant differences exist.

Three states appear at the top of both lists -- Louisiana, Texas and Florida. But elsewhere, the reports differ. For instance, Dartmouth ranked Los Angeles and New York City as among the highest-spending areas. But MedPAC rated LA at 56, using just 7 percent more services than the national average, and NYC clocks in at 174th place, almost halfway through the pack and spending 2 percent less in Medicare than the average.

Among states, Dartmouth ranked New York and Massachusetts as high spenders, while MedPAC listed a solid block of the South, including Alabama and Oklahoma as top users.

Head researcher Dr. Elliott Fisher told CQ yesterday that the Dartmouth Atlas data are consistent with the MedPAC findings.. "The implications for health care reform remain unchanged: if all regions could avoid unnecessary hospital stays and treatments as effectively as the lower spending regions, Medicare spending could be reduced by 20 percent or more," he said.

The Senate began debating its health overhaul bill this week, and it includes an estimated $380 billion in savings from the nation's health insurance program for seniors. But MedPAC's new rankings demonstrate how tricky it is to find savings in health care--even when data are plentiful.

Steadman is a reporter for Kaiser Health News, a nonprofit news service.