Health Care

Study #313 - Medicare Spending Across the Map

Though talk of fundamentally reforming Medicare has been limited lately, the baby boomers' imminent retirement and the continued rise in health care costs will force Medicare back to the forefront of upcoming policy discussions.

The Medicare Trustees and the Congressional Budget Office both predict that Medicare spending as a percentage of gross domestic product (GDP) will double by 2030. Therefore, all possible means of making Medicare more efficient should be considered in light of its increasing importance to taxpayers. One possible avenue for reform is seen in the wide regional variations in Medicare spending that exist and have persisted through time. If Medicare reimbursements could be constrained to the levels existing in the lower cost areas, the program's costs could be reduced significantly.