Geographic Variation in Medicare Drug Spending
The U.S. Congressional Budget Office estimates that gross spending on the Medicare program is expected to nearly double in nominal terms to $1,038 billion in 2020. In addition, as a proportion of gross domestic product, Medicare spending would likely grow from 3.5% in 2009 to 4.6% in 2020.
A 2010 study published in the New England Journal of Medicine, “Geographic Variation in Medicare Drug Spending,” examines spending on non-drug medical services and pharmaceutical expenses by patients across various geographical regions.
The study’s findings include:
- More than 20% of total Medicare spending was made up of pharmaceutical expenses. However, there were large variations across hospital-referral regions due mainly to the amount of and cost of drugs prescribed.
- Variations in non-drug medical spending were even more substantial than pharmaceutical expenses.
- No strong correlation between pharmaceutical spending and non-drug medical spending across hospital-referral regions, after accounting for patients’ characteristics.
The authors conclude that the “weak correlation between the level of medical spending and the level of drug spending is consistent with drugs’ being a substitute for medical care for some patients and a complement to medical care for others.” To better understand the deeper causes of geographic variations in Medicare spending, the authors suggest that studies on resource deployment and usage would shed light on public policy design to improve the quality and cost-effectiveness of U.S. health care.
Tags: health care reform
Note to instructor: The suggested assignments are designed for flexibility. They can be used in whole or part and can be adapted to a particular task — for example, the newswriting assignments could be applied to the writing of the headline, the lead, the nut graph or the full story. Material from the assignments could also be combined with other material, for example, in the writing of a background, feature or local-angle story.
Read the study titled "Geographic Variation in Medicare Drug Spending."
- Summarize the study in fewer than 40 words.
- Express the study's key term(s) in language a lay audience can understand.
- Evaluate the study's limitations. (For example: Do the results conflict with those of other reliable studies? Are there weaknesses in the study's data or research design?)
Read the issue-related New York Times article titled "Data Fuel Regional Fight on Medicare Spending."
- If you were to rewrite the article based on knowledge of the study, what key changes would you make?
- Write a lead (or headline or nut graph) based on the study.
- Spend 60 minutes exploring the issue by accessing sources of information other than the study. Write a lead (or headline or nut graph) based on the study but informed by the new information. Does the new information significantly change what one would write based on the study alone?
- Interview two sources with a stake in or knowledge of the issue. Be prepared to provide them with a short summary of the study in order to get their response to it. Write a 400-word article about the study incorporating material from the interviews.
- Spend additional time exploring the issue and then write a 1,200-word background article, focusing on major aspects of the issue.