Medicare Beneficiaries Who Spend More Get Better Outcomes

By Author: Georges Baxter
Total Articles: 15
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It probably comes as no surprise that according to a recent study the more money spent on medical services means the better overall health for Medicare beneficiaries.

“It seems reasonable that if you spend enough you should get positive results,” notes Alan Weinstock, insurance broker with MedicareSupplementPlans.com. “And here is a study that shows that spending more on Medicare beneficiaries actually results in greater survival rates and a better overall health score.”

“Medical Spending and the Health of the Elderly” Survey

The study analyzed data from more than 17,000 Medicare beneficiaries to draw this conclusion.

Previously, Medicare spending varied by geographic areas; however, expensive geographic regions did not necessarily do better than less expensive areas. For that reason policy makers considered limiting Medicare payments in high-cost areas. But this new report found that spending more did result in improvements based on an index that “measures perceived health and activity limitations.”

On the previous studies where the conclusions were that higher spending did ...
... not contribute to better health, the studies didn’t take into account individuals and the amount of medical care they each received. This report specifically determined whether there was a relationship between medical spending and better health.

What the researchers feel is important to take away from this data is that across-the-board reductions in Medicare spending either at the geographic or national level could actually prove harmful on Medicare beneficiaries’ health.

Contrary Findings

According to the February, 2009 paper, they have spent the last two decades examining regional variations in medical practice and health care spending, primarily as it relates to Medicare beneficiaries. And what they have discovered is that there is a relationship between regional differences in spending and the quality of care.

In particular, they suggest that higher spending does not automatically lead to better access to health care or to better quality of care. In fact, patient outcomes may suffer in areas where there are more physicians involved because it increases the possibilities of mistakes.

So why did this latest study seem to indicate otherwise? According to the researchers their findings were classified merely as modest, because while the statistical analysis indicated that the individuals’ health did vary with their medical care spending, there was less than a 2% increase in their health score and only a 1.5% greater survival probability.

“The key thing,” they stress, is that they did “find a positive relationship as opposed to other studies which have suggested there’s no relationship between how much care a person receives and what their health outcomes are."

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