STATE VARIATIONS IN MEDICARE EXPENDITURES

Objectives. This study examined variations in Medicare expenditures ac ross states. Methods. 1992 data on average Medicare expenditures per e nrollee, users of services per 1000 enrollees, service use per user, a nd payment per unit of service were compared across states for various services. Weighted least squares regression analysis was employed to examine total Medicare expenditures per enrollee by state. Results. Va riation in Medicare expenditures across states is driven more by avera ge number of service users per 1000 enrollees and average service unit s per user than by average payment per service unit. Medicare expendit ures per enrollee by state are primarily a function of Medicare HMO pe netration rate (P = .000), urban area (P = .001), hospital bed supply (P = .005), elderly mortality rate (P = .012), Medicare physician assi gnment rate (P = .026), percentage of primary care practitioners (P = .042), and interactions between urban elderly and percentage of primar y care physicians (P = .005) and Black elderly and nursing home bed su pply (P = .012). Conclusions. Before sweeping Medicare cuts are undert aken or excessive reliance on managed care occurs, attention should be focused on the current disproportionate distribution of expenditures across states.