Geographic Variation in Health Care Spending and Promotion of High-Value Care

Type: Consensus Study
Topics: Health Services, Coverage, and Access, Quality and Patient Safety
Board: Board on Health Care Services

Activity Description

Why do Californians spend an average of $4,600 per year on health care while Maine residents spend $6,500? Do those who pay more receive better care, or could they spend less and have the same outcomes? Understanding which factors contribute to variation and what that variation means may improve health care value—quality for the money spent.  At the request of the U.S. Secretary of Health and Human Services, the IOM will conduct a study on variation in health care spending and utilization across the country for individuals with Medicare, Medicaid, private insurance, or no insurance. Specifically, the IOM will examine how variation may or may not be related to factors such as:

  • The cost of care, the supply of care, quality of care, and health outcomes;
  • Diversity within patient populations, patients’ current state of health, access to care, insurance coverage, and patients’ preferences for their care;
  • Physicians’ decisions on what care to give and the availability of reliable medical evidence to guide those decisions; and
  • How a geographic area is defined.

To address unnecessary variation in Medicare spending, the IOM will recommend changes to specific Medicare payment systems that would promote high-value care, especially for high-volume, high-cost conditions. To this end, the IOM will consider a value index based on measures of quality and cost that payers could use to promote high-value services by health care providers.

The first committee meeting was held November 9-10, 2010, in Washington, DC. The second committee meeting was held January 17-18, 2011, in Washington, DC. This meeting included a public workshop.

A separate link has been made available for the public to submit comments.

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