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IOM issues preliminary findings on geographic variation in health care

March 22, 2013

Providing higher Medicare payment rates to hospitals and clinicians in regions of the country characterized by good health outcomes and relatively lower spending, and decreasing payment rates in regions with overall lesser quality and higher spending would not give providers the incentive to deliver care more efficiently, according to a report released today by an Institute of Medicine committee. To be effective, payment reforms need to encourage behavioral changes at the point of health care decision making, which occurs at the level of individual providers and health care organizations, the committee said. The report contains preliminary findings from a congressionally mandated study of regional variation in health care spending, use and quality, and the merits of adopting a geographic value index. The committee expects to issue a final report with recommendations this summer, which will include additional analyses.