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Variations in Healthcare Costs

Posted on : June 9, 2009 | By : Bill Stapleton | In : Doctors and Providers, Health Insurance

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One of the more obvious ways to cut healthcare costs and create more saving is to eliminate the large variations in healthcare costs across the country.  This theory, however, hinges on the notion that there is little or no difference in patient care across the country.  In a city like Miami, for instance, the average Medicare costs per patient is $16, 351, nearly triple the amount per patient in a city like La Crosse, Wisconsin, without clear evidence of difference in patient care, the Washington Post reported today.   If there really is no difference in the patient care, then eliminating the variations in healthcare payments would save a lot of money and make a lot of sense.  My one question would be what sort of clear evidence are they looking for to determine a difference in patient care? In other words, how are they sure there is reallyno difference in patient care and overall patient experience between cities like Miami and La Crosse? Surely, eliminating the variation in different regions across the country would not hurt a city like La Crosse but I am not sure the citzens of Miami would feel comfortable losing their quality of care.  The Wall Street journal has reported. It will be interesting to see how drastic the changes in variations in healthcare costs across the country will be.

Miami will not be happy if it is forced to severely sacrifice its quality of healthcare for lower costs.
Miami will not be happy if it is forced to severely sacrifice its quality of healthcare for lower costs.
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Comments (1)

The variance in cost of care is driven by two critical factors. First, what treatment is being provided for a given diagnosis and second, what is the cost of the treatment. It is fair to assume that people in Miami are receiving more “treatments” or are paying more. Unfortunately, there is no measure that relates this behavior to better care.

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