An Empirical Analysis of Avoidable Medicare Payments and Medicare Payment Variations

Abstract

This study investigates the determinants of average Medicare payments, focusing on the impact of secondary diagnoses, demographic factors, and regional disparities. Our model reveals that major complications and comorbidities (MCCs) significantly increase average Medicare payments compared to less severe complications (CCs), with coefficients of 7674.13 and 1542.67, respectively. Higher percentages of the elderly living in poverty correlate with increased payments, highlighting the influence of social determinants on healthcare costs. Demographic analysis shows that counties with higher populations of Black, Hispanic, Asian, or other races receive higher Medicare payments, indicating potential racial disparities in healthcare access and quality. Political affiliation also plays a role, with Democrat-voting counties incurring higher Medicare costs. Surprisingly, larger populations served correlate with decreased payments, possibly due to cost-containment programs like Medicare’s Competitive Bidding. State-level analysis reveals significant regional variations, with states like Oregon and Wyoming showing higher payments, while Mississippi and Georgia have the lowest. Our findings underscore the complexity of Medicare funding and the need for targeted policy interventions to address health disparities and ensure sustainable healthcare delivery.