New study highlights wide gap in healthcare spending in 50 states

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There is a large and growing gap between states in health spending, according to a new report. Some states spend twice as much on health care per person as other states, according to the report.

The study, conducted by the Institute for Health Metrics and Evaluation (IHME) at the University of Washington School of Medicine and published in the journal Health Affairs, looked at the health care wait in all 50 states in 2015 to 2019.

The researchers found that at the end of this period, state-specific per capita spending ranged from $7,250 to $14,500. Increases in per capita health care spending ranged from 1.0% in Washington, DC to 4.2% in South Dakota between 2013 and 2019 (after adjusting for inflation).

The biggest drivers of variation were interstate income and consumer prices. In other words, states with higher wealth and higher consumption costs saw their spending increase. “Our analysis suggests that a significant portion of the variation in healthcare spending is associated with non-healthcare system factors, such as household income and consumer prices,” says spending researcher Emily Johnson. Health at IHME and lead author of the study. “However, much of the variation in spending is not explained by major non-health system factors and therefore represents variation caused by differences in how states manage their health systems. States with higher health care costs can learn a lot from other states that provide high quality health care more efficiently.

Where there is more wealth, there is more spending

The report’s findings describe a system that varies widely by location – and while it could be argued that it makes sense that prices would be higher in areas that can pay more, the researchers note that health care are not just any product – that spending less has a real impact on people’s lives.

“Regional income and consumer prices combine in such a way that wealthy states with the highest prices consistently have the highest estimated health expenditures per person,” the report says. “At the same time, people living in lower middle-income states had lower spending despite generally higher need for health care in poor areas due to consistently poorer health.”

Higher healthcare spending also indicates more healthcare providers, the report says: “Substantial evidence suggests that increasing the general supply of clinical healthcare personnel improves overall healthcare efficiency through an increase in the efficiency of the delivery of medical care services”.

Medicaid expansion = 1% cost increase

The article also discusses how the ACA’s Medicaid expansion has affected costs. The report adds that Medicaid expansion under the Affordable Care Act (ACA) was associated with increased spending per person, but median spending in expanding states showed slower growth in out-of-pocket spending. than the same spending in non-expanding states. .

After the ACA was passed, some states launched a legal challenge to the health care law. In 2012, the Supreme Court ruled that states can opt out of Medicaid expansion, and 12 states, including Alabama, Florida and Georgia, continue to do so.

The Health Affairs study found that Medicaid expansion was associated with a 1% increase in health care costs across all states. The researchers added that this is a small variation and pales in comparison to other factors such as income and consumer prices.

“For children, expanding Medicaid eligibility was associated with lower health care spending, likely due to increased access to preventive medicine, and for pregnant women, increased eligibility was associated with lower out-of-pocket spending,” the report said. He adds that average out-of-pocket spending growth rates were lower in states that expanded access to Medicaid (0.3% for Medicaid-expanding states versus 1.2% for non-expanding states) and that private insurance expenditure growth rates were also lower. in these states (1.1% for Medicaid expansion states versus 2% for non-expansion states).

Related: California Study Links Increased Primary Care Spending to Better Outcomes

“We know from previous studies that when states embrace Medicaid expansion, people have better access to health care and, by some measures, better health outcomes,” says Dr. Joseph Dieleman, Professor associate in the Department of Health Metrics Sciences at the University of Washington and lead author of the study. “For the first time, there is reliable research that reports the costs to all payers of expanding Medicaid eligibility, including tracking changes in out-of-pocket expenses.”

The study authors say their work is a step toward a better understanding of health care costs in the United States, and add that the piecemeal, state-by-state system the United States currently has is suffering. high costs and uneven quality.