Background: The health implications of regional differences in Medicare spending are unknown. Objective: To determine whether regions with higher Medicare spending provide better care. Design: Cohort study. Setting: National study of Medicare beneficiaries. Patients: Patients hospitalized between 1993 and 1995 for hip fracture (n = 614 503), colorectal cancer (n = 195 429), or acute myocardial infarction (n = 159 393) and a representative sample (n = 18 190) drawn from the Medicare Current Beneficiary Survey (1992-1995). Exposure Measurement: End-of-life spending reflects the component of regional variation in Medicare spending that is unrelated to regional differences in illness. Each cohort member's exposure to different levels of spending was therefore defined by the level of end-of-life spending in his or her hospital referral region of residence (n = 306). Outcome Measurements: Content of care (for example, frequency and type of services received), quality of care (for example, use of aspirin after acute myocardial infarction, influenza immunization), and access to care (for example, having a usual source of care). Results: Average baseline health status of cohort members was similar across regions of differing spending levels, but patients in higher-spending regions received approximately 60% more care. The increased utilization was explained by more frequent physician visits, especially in the inpatient setting (rate ratios in the highest vs. the lowest quintile of hospital referral regions were 2.13 [95% CI, 2.12 to 2.14] for inpatient visits and 2.36 [CI, 2.33 to 2.39] for new inpatient consultations), more frequent tests and minor (but not major) procedures, and increased use of specialists and hospitals (rate ratio in the highest vs. the lowest quintile was 1.52 [CI, 1.50 to 1.54] for inpatient days and 1.55 [CI, 1.50 to 1.60] for intensive care unit days). Quality of care in higher-spending regions was no better on most measures and was worse for several preventive care measures. Access to care in higher-spending regions was also no better or worse. Conclusions: Regional differences in Medicare spending are largely explained by the more inpatient-based and specialist-oriented pattern of practice observed in high-spending regions. Neither quality of care nor access to care appear to be better for Medicare enrollees in higher-spending regions.
