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Extent and sources of geographic variation in Medicare end-stage renal disease expenditures.

R A Hirth1, P J Tedeschi, J R Wheeler

  • 1Departments of Health Management and Policy and Internal Medicine and the Kidney Epidemiology and Cost Center, University of Michigan, Ann Arbor, MI, USA. rhirth@umich.edu

American Journal of Kidney Diseases : the Official Journal of the National Kidney Foundation
|September 29, 2001
PubMed
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Geographic variations in end-stage renal disease (ESRD) spending show threefold differences across regions. Key drivers include dialysis modality, hospitalization rates, and healthcare wages, not patient demographics.

Area of Science:

  • Nephrology
  • Health Economics
  • Healthcare Management

Background:

  • Geographic variations in healthcare practices and spending are common.
  • Concerns exist regarding suboptimal clinical care and economic inefficiency in certain regions.
  • Understanding these variations is crucial for improving healthcare delivery.

Purpose of the Study:

  • To quantify geographic variations in Medicare expenditures for end-stage renal disease (ESRD) patients.
  • To identify the primary sources contributing to these expenditure variations.

Main Methods:

  • Analysis of Medicare expenditures for all ESRD patients in 1997 (n=284,670).
  • Expenditures summarized at the hospital referral region (HRR) level.
  • Regression analysis to correlate expenditures with demographics, case mix, dialysis characteristics, therapy modalities, hospitalization ratios, and wages.

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Main Results:

  • Annual Medicare spending per ESRD patient varied threefold across HRRs ($17,791 to $59,025).
  • Regression models explained 80% of the spending variation.
  • Patient distribution across renal replacement therapies, hospitalization patterns, and healthcare wages were the strongest predictors, more so than demographics or case mix.

Conclusions:

  • Substantial geographic variability exists in ESRD expenditures, suggesting potential for efficiency and quality improvements.
  • Interventions focusing on increasing transplantation, ensuring peritoneal dialysis access, and reducing hospitalizations are promising.
  • ESRD expenditures exhibit significantly larger variation compared to general Medicare spending.