Medical Equipment, Home Health Cause Most Geographic Variation In Medicare FFS Health Care Costs

Geographic variation in total Medicare fee-for-service (FFS) utilization during the 2004-2006 period was disproportionately due to variations in durable medical equipment and home health use. When service categories were examined individually, FFS beneficiary utilization of durable medical equipment and Medicare Part B medications was 3.5 times higher in the highest cost geographic areas than in the lowest cost areas, and their utilization of home health and diagnostic testing was 2.7 times higher in the highest cost areas than in the lowest cost areas. By contrast, inpatient hospital use among beneficiaries in the highest use areas . . .