NCPA - National Center for Policy Analysis


September 18, 2007

Americans living in the Northeast spend much more on health care than those living in other regions, particularly the Southwest, but no single factor easily explains the discrepancy, according to analysts at the Centers for Medicare and Medicaid Services.


  • Residents of 10 states, including Alaska, but primarily in Northeastern states like Massachusetts, Maine, New York and Vermont, spent $6,345 per person in 2004, nearly 20 percent more than the $5,283 national average.
  • Residents of Utah, Arizona, Idaho, New Mexico and Nevada, only spent $4,244 per person in 2004, or 20 percent below the national average.

The authors conclude that a variety of factors contributed to the difference.  In some Northeastern states such as Massachusetts and Connecticut, higher personal income and a greater number of doctors per capita may have led to more use of health services.  Further:

  • Among the biggest drivers is spending on Medicaid -- In New York, the cost per recipient totaled $10,173 in 2004, among the highest in the country.
  • But the correlation with Medicare wasn't so strong; a high portion of Medicare enrollees live in Florida and Maine, for example, but per-person spending in Florida was $2,400 more than in Maine in 2004.

Demographics also played a significant role.  The states with the lowest level of spending on health care, such as Utah, have younger populations and tend to be rural.  In addition, the study didn't compare quality, but Elliott S. Fisher, a professor at Dartmouth Medical School, said his studies of Medicare spending showed that "higher spending is not associated with better quality or better outcomes."

Source: Jane Zhang, "Health-Care Spending Is Highest in Northeast," Wall Street Journal, September 18, 2007.

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