Geographic Variation

In recent years, there has been an increasing national focus on geographic variation in the cost and quality of care across the nation. Some studies show the quality of care and the cost of care can vary significantly in different regions of the country, and even within a single state. The reasons for this variation are complex and federal initiatives are looking to address geographic variation. Currently, the Institute of Medicine (IOM) is  studying the issue of geographic variation in Medicare and other payer reimbursement.

Florida faces some unique challenges that influence how care is delivered and the variation in costs. Specifically, Florida has:

    • the highest percentage of population covered by Medicare;
    • lower health status of the population relative to other states;
    • 4 million uninsured Floridians (10% of the nation's uninsured);
    • high number of undocumented residents;
    • insufficient access to primary care prior to becoming Medicare eligible; and
    • a severe shortage of physicians.

FHA believes Medicare payments should reward better quality performance and greater efficiency in delivering care. Florida's hospitals are continually seeking opportunities to implement programs that enhance patient safety and improve care delivery. Statewide, 135 hospitals are working with FHA to eliminate hospital-acquired infections, complications following surgery and avoidable readmissions. FHA supports the IOM's effort to conduct necessary research prior to recommending payment revisions to account for geographic variation.

FHA urges Congress to ensure that any new outcomes-based payment system that may be developed to address geographic variation in Medicare spending recognizes the unique characteristics of states like Florida that have large populations of low income, uninsured and elderly patients.

For more information, contact FHA Vice President of Financial Services Kathy Reep