State-Level Variation In Low-Value Care For Commercially Insured And Medicare Advantage Populations

Abstract

Low-value care is a major source of health care inefficiency in the US. Our analysis of 2009-19 administrative claims data from OptumLabs Data Warehouse found that low-value care and associated spending remain prevalent among commercially insured and Medicare Advantage enrollees. The aggregated prevalence of twenty-three low-value services was 1,920 per 100,000 eligible enrollees, which amounted to $3.7 billion in wasteful expenditures during the study period. State-level variation in spending was greater than variation in utilization, and much of the variation in spending was driven by differences in average procedure prices. If the average price for twenty-three low-value services among the top ten states in spending were set to the national average, their spending would decrease by 19.8percent (from $735,000 to $590,000 per 100,000 eligible enrollees). State-level actions to improve the routine measurement and reporting of low-value care could identify sources of variation and help design state-specific policies that lead to better patient-centered outcomes, enhanced equity, and more efficient spending.