Medicare costs and surgeon supply in hospital service areas
Thomas C Ricketts1, Daniel W Belsky
1American College of Surgeons Health Policy Research Institute, Cecil G. Sheps Center for Health Services Research, The University of North Carolina at Chapel Hill, NC, USA. ricketts@schsr.unc.edu
Objective:
To quantify the correlates of variations of Medicare per beneficiary costs at the hospital service area level and determine whether physician supply and the specialty of physicians has a significant relationship with cost variation.
Background:
The American Medical Association Masterfile data on physician and surgeon location, characteristics and specialty; Census derived sociodemographic data from 2006 ZIP code level Claritas PopFacts database; and Medicare per beneficiary costs from the Dartmouth Atlas of Health Care project.
Methods:
A correlational analysis using bivariate plots and fixed effects linear regression models controlling for hospital service area sociodemographics and the number and characteristics of the physician supply. Data were aggregated to the Dartmouth hospital service area level from ZIP code level files.
Results:
We found that costs are strongly related to the sociodemographic character of the hospital service areas and the overall supply of physicians but a mixed correlation to the specialist supply depending on the interaction of the proportion of the physician supply who are international medical graduates. The ratio of general surgeons and surgical subspecialists to population are associated with lower costs in the models, again with difference depending on the influence of international medical graduates. There is a strong association between higher costs and the local proportion of physician supply made up of graduates of non-US or Canadian medical schools and female graduates.
Conclusions:
These results suggest that strategies to reduce overall costs by changing physician supply must consider more than just overall numbers.
Insights
Medicare costs vary by hospital service area, influenced by sociodemographics and physician supply. Simply increasing physician numbers isn't enough; specialty and origin matter for cost reduction.
Area of Science:
- Health economics
- Healthcare policy
- Medical workforce analysis
Background:
- Utilized American Medical Association Masterfile data for physician demographics and specialty.
- Incorporated Census-derived sociodemographic data and Medicare per beneficiary costs from the Dartmouth Atlas.
- Aggregated data from ZIP code to hospital service area levels for analysis.
Purpose of the Study:
- To identify factors correlating with Medicare per beneficiary cost variations.
- To assess the relationship between physician supply, specialty, and healthcare costs.
- To understand how physician characteristics influence cost disparities across regions.
Main Methods:
- Employed correlational analysis with bivariate plots and fixed effects linear regression.
- Controlled for hospital service area sociodemographics and physician supply characteristics.
- Analyzed data aggregated at the Dartmouth hospital service area level.
Main Results:
- Healthcare costs strongly correlate with area sociodemographics and overall physician supply.
- Specialist supply showed mixed correlation with costs, influenced by international medical graduates.
- Higher costs associated with a greater proportion of female physicians and graduates from non-US/Canadian medical schools.
Conclusions:
- Strategies to reduce Medicare costs must consider physician supply composition, not just numbers.
- Physician specialty, origin, and gender interact to influence healthcare spending.
- Area sociodemographics are significant drivers of Medicare cost variations.
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