Medicare - cutting costs without cutting benefits

by Andy Kurz

Andy Kurz has over 12 years executive level experience in finance and risk management, including CFO for a Midwest Blue Cross and Blue Shield Insurer. Retired now, he had decades of involvement with financial applications and analytical software.

Many seniors have become fearful that cutting excess costs means cutting benefits. Medicare’s own data highlights differences between about 20% of states with the lowest costs and 20% of states with the highest costs. Cost of living explains some of the differences. But 71% higher physician and clinical service costs for essentially the same results suggests there are billions of dollars being spent with little or no added benefit.

Medicare Spending Discrepancies

States (all data from 2004 Center for Medicare and Medicaid Services)	Population	Medicare Spending	For Similar Results
26 states and the District of Columbia – combined Medicare population 17.9 million
Alaska, Arkansas, Idaho, Iowa, Kansas, Kentucky, Maine, Massachusetts, Minnesota, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oregon, South Dakota, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming	20% of ALL Medicare Recipients in the U.S.	$12.5 billion in physician and clinical services	For every $100 spent on physician and clinical services in this group ...
California, District of Columbia, Florida, Nevada, New Jersey	21% of ALL Medicare Recipients in the U.S.	$22.6 billion in physician and clinical services	states in this group spent $171