Arnold Kling

Health Care Spending Pattern Puzzle

Arnold Kling, Great Questions of Economics
Previous Entry Next Entry

One more noteworthy item from The Atlantic Monthly. Shannon Brownlee finds that health care spending differs by location.

A sixty-five-year-old in Miami will typically account for $50,000 more in Medicare expenses over the rest of his life than a sixty-five-year-old in Minneapolis.

She extrapolates from this that there are opportunities to reduce health care costs by getting the high-cost states to change their service patterns to match those of the low-cost states.

She cites this paper by John E. Wennberg, Elliott S. Fisher, and Jonathan S. Skinner.

Studies at the population level indicate no net advantage in terms of life expectancy for Medicare enrollees living in regions with more hospital resources (and hospitalizations) and greater care intensity as measured by more aggressive treatment patterns during the last six months of life. Longitudinal (cohort) studies of patients with similar diseases (such as hip fracture) who have been followed for a number of years also show that patients living in high-care-intensity regions gain no survival advantage over those in low-intensity regions.

Discussion Question. Why would economists expect to see different results if people were paying for their own medical care?

Discussion Question.

Return to top