Summary

Description

Modeling Per Capita State Health Expenditure Variation State-Level Characteristics Matter, published in Volume 3, Issue 4, of the Medicare and Medicaid Research Review, focuses on average spending in personal health care per capita at the state level for all payers. In contrast to this work, most of the prior research on geographic variation in health spending focused on health spending for Medicare enrollees, at a sub-state or individual level. This paper shows that state-level income, health care capacity, and the share of elderly residents are the most important factors in explaining variation in personal health care spending per capita among states over time. Because the slow-moving nature of health spending per capita and close relationships among state-level factors create inefficiencies in modeling this variation, multiple modeling strategies were utilized to obtain more robust interpretations of the overall results.