Study Finds Major Geographic Differences in Medicare Drug Spending

The study, published in the New England Journal of Medicine finds that some regions in the U.S. spend twice as much as others on drugs under Medicare. Dr. Yuting Zhang is a professor of Heath Economics at the University of Pittsburgh and is the lead author of the report. She also found little correlation between spending on drugs and spending on other medical services like hospitalizations and visits to the doctor. Zhang sees the study as an important tool for health care reform and bringing down medical costs. She says eventually they can use the data to learn why some places are inefficient with their spending and how to emulate best practices from other areas that keep their costs low while maintaining quality patient care. Researchers divided the country into 306 hospital-referral regions and controlled for geographic differences in cost, demographics, insurance and overall health. Manhattan New York spends the most on drugs under Medicare at $2,973 annually per beneficiary, the Hudson Florida area spends the least per beneficiary at $1,854 per year. Out of the 306 regions Johnstown Pennsylvania was ranked the 15th highest spender on drugs, but came in at 242 in overall medical spending. Pittsburgh ranked 59 and 61 respectively. Zhang says they will conduct follow-up studies focused on doctors' prescribing practices and a comparison of the prescription of generic and brand name drugs.