Widespread regional variations in health care spending, documented by researchers at Dartmouth, suggest that there is much waste in high-spending areas. If so, billions of dollars could potentially be saved by simply changing the way medicine is practiced.
But a new paper by Louise Sheiner, an economist at the Federal Reserve, concludes that health and socioeconomic factors—e.g., the prevalence of smoking, obesity and diabetes—best explain why health spending in some regions of the country is higher. That view has been argued for years by researchers such as Dr. Richard “Buz” Cooper of the University of Pennsylvania.
NCPA Senior Fellows, Andrew Rettenmaier and Thomas Saving have also found other reasons for the geographic variations in medical spending.