Medicare fees and small area variations in breast-conserving surgery amongelderly women

This study used data from Medicare files, the American Hospital Association 's Annual Survey of Hospitals, and the 1990 census to investigate whether M edicare fees for breast-conserving surgery (BCS) and mastectomy (MST) affec ted the rate of BCS across 799 3-digit ZIP code areas in 1994. The full mod el, which was based on the conceptual framework of the supply of and demand for different treatments, explained 51 percent of the variation in BCS rat es. Medicare fees were statistically significant and had the hypothesized e ffects:a 10 percent higher BCS fee was associated with a 7 to 10 percent hi gher BCS rate, while a 10 percent higher MST fee was associated with a 2 to 3 percent lower proportion receiving BCS. Other significant economic varia bles were proximity to a radiation therapy hospital, a teaching hospital or a cancer center, and the percentage of elderly women with incomes below th e poverty rate, which were negatively related to the BCS rate. Variations i n age, race, and metropolitan populations had small or insignificant effect s. The single most important variable was the percentage of cases with one or more comorbidities.