Health Care Spending Highest in Northeastern U.S., According to CMS

U.S. residents in the Northeast spend more on health care per capita than those in other areas of the nation, according to a study published on Monday on the Web site of the journal Health Affairs, the Wall Street Journal reports (Zhang, Wall Street Journal, 9/18). For the study, analysts at CMS examined spending on health care from health insurance, personal expenses, Medicare, Medicaid and other sources for 2004 (Schmid, AP/San Francisco Chronicle, 9/18).

The study found that residents of 10 states -- which included Alaska, New York, Maine, Massachusetts and Vermont -- in 2004 spent an average of $6,345 on health care per capita, almost 20% more than the national average of $5,283. In addition, the study found that residents of Arizona, Idaho, New Mexico and Nevada in 2004 spent an average of $4,244 on health care per capita, about 20% less than the national average (Wall Street Journal, 9/18).

According to the study, residents of Washington, D.C., in 2004 spent the most on health care per capita at $8,295; followed by Massachusetts at $6,683; Maine at $6,540; and New York at $6,535. Residents of Utah in 2004 spent the least on health care per capita at $3,972, the study found. Nationwide, spending on health care per capita increased by an average of 6.3% annually from 1998 to 2004, according to the study.

Comments
Anne Martin, a co-author of the study and an economist with the CMS Office of the Actuary, said, "Most of these states have consistently had the highest spending over time. There is no one clear explanation, but there are several similar characteristics among these states" (AP/San Francisco Chronicle, 9/18). Martin attributed the differences in spending on health care per capita among states to variations in the ages and incomes of residents, the numbers of physicians per capita, the levels of benefits provided by public health insurance programs and private health plans, and the services used by residents.

Sara Rosenbaum, a health law and policy professor at George Washington University, said that the study helps "explain why some states can achieve health care reform on their own, without a huge infusion of federal money, while others cannot." She added, "In a low-spending state like New Mexico, you have less money in the health care system that can be recaptured and invested in coverage for the uninsured. In a high-spending state like Massachusetts, the health care system has the resources to subsidize coverage of the uninsured" (Pear, New York Times, 9/18).

The study did not compare the quality of health care among states, but Elliot Fisher, a professor at Dartmouth Medical School, said that "higher spending is not associated with better quality or better outcomes" (Wall Street Journal, 9/18). Karen Davis, president of the Commonwealth Fund, added, "States that spend more per capita often have a lower quality of care" (New York Times, 9/18).
The study is available online.