BACKGROUND:

The health implications of regional differences in Medicare spending are unknown.

OBJECTIVE:

To determine whether regions with higher Medicare spending achieve better survival, functional status, or satisfaction with care.

DESIGN:

Cohort study.

SETTING:

National study of Medicare beneficiaries.

PATIENTS:

Patients hospitalized between 1993 and 1995 for hip fracture (n = 614,503), colorectal cancer (n = 195,429), or acute myocardial infarction (n = 159,393) and a representative sample (n = 18,190) drawn from the Medicare Current Beneficiary Survey (MCBS) (1992-1995). EXPOSURE MEASUREMENT: End-of-life spending reflects the component of regional variation in Medicare spending that is unrelated to regional differences in illness. Each cohort member's exposure to different levels of spending was therefore defined by the level of end-of-life spending in his or her hospital referral region of residence (n = 306).

OUTCOME MEASUREMENTS:

5-year mortality rate (all four cohorts), change in functional status (MCBS cohort), and satisfaction (MCBS cohort).

RESULTS:

Cohort members were similar in baseline health status, but those in regions with higher end-of-life spending received 60% more care. Each 10% increase in regional end-of-life spending was associated with the following relative risks for death: hip fracture cohort, 1.003 (95% CI, 0.999 to 1.006); colorectal cancer cohort, 1.012 (CI, 1.004 to 1.019); acute myocardial infarction cohort, 1.007 (CI, 1.001 to 1.014); and MCBS cohort, 1.01 (CI, 0.99 to 1.03). There were no differences in the rate of decline in functional status across spending levels and no consistent differences in satisfaction.

CONCLUSIONS:

Medicare enrollees in higher-spending regions receive more care than those in lower-spending regions but do not have better health outcomes or satisfaction with care. Efforts to reduce spending should proceed with caution, but policies to better manage further spending growth are warranted.