Testimony of U.S. Representative Allyson Schwartz Institutes of Medicine

1. Testimony of U.S. Representative Allyson Schwartz Institutes of Medicine Committee on Geographic Variation in Health Spending and Promotion of High-Value Care November 9, 2010

2. Medicare Spending per Beneficiary by Hospital Referral Region

3. Medicare Spending per Beneficiary by State Adjustments: Rates are adjusted for age, sex and race using the indirect method, using the U.S. Medicare population as the standard. Gender-specific rates are age and race adjusted; race-specific rates are age and sex adjusted. Source: http://www.dartmouthatlas.org/data/map.aspx?ind=123&ch=19%2C32&tf=10&loct=2&extent=-14071323.410590487%202305693.8872850095%20-7398676.589409513%206806306.112714991

4. Medicare Spending per Beneficiary, by State Adjusted for Wages, Health Status, and DGME/IME/DSH

5. Medicare Spending per Beneficiary, by Hospital-Referral Region “Values differ from those in the Dartmouth Atlas primarily because we adjusted for a longer list of patient health characteristics but also because we included only Medicare beneficiaries with stand-alone Part D plans and included out-of-pocket spending along with Medicare reimbursement.” Geographic Variation in Medicare Drug Spending Yuting Zhang, Ph.D., Katherine Baicker, Ph.D., and Joseph P. Newhouse, Ph.D.

6. Total Health Care Expenditures per Capita Source: http://www.statehealthfacts.org/comparemaptable.jsp?ind=596&cat=5

7. Average Annual Percent Growth in Medicare Spending per Enrollee by State of Residence 1995-2004 http://www.statehealthfacts.org/comparemaptable.jsp?ind=629&cat=6

8. Medicare spending shows substantial geographic variation with California having higher spending than U.S. average & higher than Minnesota, with LA County higher than California Medicare spending for hospitalizations in the last 2 years of life for patients with one of nine chronic conditions (2001-05) Medicare spending per capita by HRR, 2005 LA Co Cal Minn U.S. LA Co Cal Minn U.S. http://www.dartmouthatlas.org/interactive_map.shtm http://www.dartmouthatlas.org/data/download.shtm

9. Does the oversupply of resources cause high Medicare spending? California Minnesota Hospital beds/1000 (2007) Admissions/1000 In-pt. days/1000 RNs/100,000 (2008) MDs/1000 PCPs/1000 1.9 90 469 654 3.1 1.2 3.0 122 756 1,068 3.4 1.4 Evidence does not support such a theory www.Statehealthfacts.org www.cms.hhs.gov/NationalHealthExpendData/downloads/res-us.pdf

10. Lowest incomes have highest health care utilization & cost Percent of households with income under $15,000 Health Affairs. 12 :163, 93.

11. Poverty concentrated in LA County in central core Core L.A.Minnesota Population Per capita income % Black/Hispanic % < 100% poverty % Uninsured 2,265,900 $11,500 80% 56% 24% 5,165,000 $37,373 9% 11.6% 8.8%

12. Almost entire difference in Medicare spending between LA & Minnesota is result of high spending in poverty core Medicare hospital days/1,000 Medicare enrollees(2007) LA Core LA California Minnesota U.S. without core without LA core Zip Code Databook 2007 www.unitedwayla.org www.Statehealthfacts.org California OSHPD