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June 16, 2017

The huge state-by-state variation in hospital spending, mapped

Daily Briefing

    States vary widely in their per-capita health care spending, but where states rank on their spending hasn't changed much in recent years, according to an analysis published Wednesday in Health Affairs.

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    For the analysis, CMS researchers reviewed federal data on per-capita health spending in each state and per-enrollee spending by Medicare, Medicaid, and private insurance. The authors focused their analysis on 2010 to 2014—ending with the year the Affordable Care Act's (ACA) coverage expansions took effect.

    Personal health care spending

    Overall, the national average for personal per-capita health care spending was $8,045 in 2014, CMS data show.

    However, the researchers observed "a nearly twofold difference" in per-capita personal spending between the highest-spending state—Alaska at $11,064—and the lowest spending state—Utah at $5,982. Alaska and Utah have held their respective spending distinctions since 2012, the researchers wrote. The CMS data also covered Washington, D.C., which had spending slightly higher than Alaska, at $11,944.

    The researchers wrote, "States with spending that is higher than the national average tend to be located in the New England, Mideast, Great Lakes, and Plains regions."

    Regionally, personal per-capita health spending in 2014 was:

    • $10,119 in New England;
    • $9,370 in the Mideast/Mid-Atlantic;
    • $8,389 in the Great Lakes;
    • $8,379 in the Plains;
    • $7,629 in the Far West;
    • $7,562 in the Southeast;
    • $6,978 in the Southwest; and
    • $6,814 in the Rocky Mountains.

    The authors said state-to-state variation in personal per-capita health care spending appears tied to several factors. States with high health spending per capita have relatively high personal income per capita, higher percentages of residents enrolled in Medicare or Medicaid, and greater health care capacity, according to the report. By contrast, states with relatively lower per-capita health spending had relatively high rates of uninsurance, the researchers wrote.

    The effects of the ACA's coverage expansions

    According to the Health Affairs report, annual growth in personal health care spending within states was tied to how a state implemented the early stages of the ACA's coverage expansions, as well as the extent to which broader economic recession and recovery trends panned out differently across states.

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    Most states experienced an increase in per-capita health care spending growth  between 2013 and 2014, in part because of the ACA's coverage expansions, the researchers wrote. However, states that expanded Medicaid and states that did not expand Medicaid showed similar growth rates, which the authors attributed to two factors:

    • Expansion states had faster growth in utilization relative to non-expansion states because of greater increases in the percentage of insured residents; and
    • Non-expansion states saw faster growth in spending per insured person relative to expansion states.

    Meanwhile, states that expanded their Medicaid programs saw bigger increases in Medicaid spending between 2013 and 2014, compared with non-expansion states. However, expansion states saw per-enrollee spending decline by 5.1 percent between 2013 and 2014, while non-expansion states saw such spending increase by the same amount.

    Hospital services spending

    The CMS data also tracked state-by-state trends in per-capita spending for hospital services. The national average for such spending in 2014 was $3,079, according to the data.  

    Among U.S. states, Arizona had the lowest per-capita hospital services spending in 2014, at $2,337, while Alaska had the highest spending, at $4,715. Washington, D.C., ranked highest overall, at $5,223.

    Regionally, per-capita spending for hospital services in 2014 was:

    • $3,780 in New England;
    • $3,491 in the Great Lakes region;
    • $3,433 in the Mideast/Mid-Atlantic region;
    • $3,431 in the Plains region;
    • $2,833 in the Rocky Mountains;
    • $2,817 in the Far West;
    • $2,807 in the Southeast; and
    • $2,703 in the Southwest (Frieden, MedPage Today, 6/14; CMS data, 6/14; Lassman, Health Affairs, June 2017).

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