Abstract
Despite substantial geographic variation in Medicare per beneficiary spending in the US, little is known about the extent to which social determinants of health (SDoH) are associated with this variation. To determine the associations between SDoH and county-level price-adjusted Medicare per beneficiary spending. This cross-sectional study used county-level data on 2017 Medicare fee-for-service (FFS) spending, patient demographic characteristics (eg, age and gender) and clinical risk score, supply of health care resources (eg, number of hospital beds), and SDoH measures (eg, median income and unemployment rate) from multiple sources. Multivariable regressions were used to estimate the association of the variation in spending across quintiles with SDoH. 2017 county-level price-adjusted Medicare Parts A and B spending per beneficiary. SDoH measures included socioeconomic position, race/ethnicity, social relationships, and residential and community context. Among 3038 counties with 33 495 776 Medicare FFS beneficiaries (18 352 336 [54.8%] women; mean [SD] age, 72 [1.5] years), mean Medicare price-adjusted per beneficiary spending for counties in the highest spending quintile was $3785 (95% CI, $3706-$3862) higher, or 49% higher, than spending for bottom-quintile counties (mean [SD] spending per beneficiary, $11 464 [735] vs $7679 [522]; P < .001). The total contribution (including through both direct and indirect pathways) of SDoH was 37.7% ($1428 of $3785) of this variation, compared with 59.8% ($2265 of $3785) by patient clinical risk, 14.5% ($549 of $3785) by supply of health care resources, and 19.8% ($751 of $3785) by patient demographic characteristics. When all factors were included within the same model, the direct contribution of SDoH was associated with 5.8% of the variation, compared with 4.6% by supply, 4.7% by patient demographic characteristics, and 62.0% by patient clinical risk. These findings suggest social determinants of health are associated with considerable proportions of geographic variation in Medicare spending. Policies addressing SDoH for disadvantaged patients in certain regions have the potential to contain health care spending and improve the value of health care; patient SDoH may need to be accounted for in publicly reported physician performance, and in value-based purchasing incentive programs for health care professionals.
Highlights
Medicare spending per beneficiary varies substantially across geographic regions in the US
When all factors were included within the same model, the direct contribution of social determinants of health (SDoH) was associated with 5.8% of the variation, compared with 4.6% by supply, 4.7% by patient demographic characteristics, and 62.0% by patient clinical risk
These findings suggest social determinants of health are associated with considerable proportions of geographic variation in Medicare spending
Summary
Medicare spending per beneficiary varies substantially across geographic regions in the US. Since differences in patient clinical risk and demographic characteristics do not fully explain regional variation in spending, and higher spending regions did not have better health outcomes,[1,2,3,4] this substantial variation has largely been attributed to wasteful utilization.[2,5,6,7,8] Prominent research in the 1990s suggested that the primary driver of this spending variation was physician-induced demand reflected by the supply of local health resources, in particular hospital beds and specialist physicians.[1,9] Despite the payment and delivery reforms in the past decade, geographic variation in Medicare spending only had limited reduction.[10].
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