Examining Healthcare Spending Across US Counties

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Although the United States spends an exorbitant amount on healthcare, amounts across the individual states vary. In fact, studies have so that there are some counties that spend more than five times as much per person as other counties.^1,2 Such variety in public, commercial, and out-of-pocket (OOP) spending can help provide a snapshot of health policy data.

While studies that dive into the factors that influence variety in spending across US counties exist, some argue that there are potential gaps in these analyses, including the fact that much of the research focuses on Medicare.^3,4

Keeping that in mind, a cross-sectional study published in JAMA Health Forum⁵ sought to further explore the drivers behind such spending, using population age, prevalence of health condition, service utilization, and service price and intensity to help explain the data.

In analysis that was conducted between March and July 2024, data revolving around four main drivers of per capita spending were pulled for a total of 3,110 US counties, including 148 health conditions, 38 age-sex groups, seven types of care, and four payer categories for 2019. Service utilization was measured as service volume per prevalent case. Meanwhile, price and intensity were measured as spending per visit, admission, or prescription.

To assess each driver’s contribution, the investigators used Das Gupta and Shapley decomposition methods, along with linear regression.

Results indicated that 76.6% of personal health care spending was included in the study. Analysis showed that 64.8% of healthcare spending variation among the selected US counties was explained by service utilization; population age, disease prevalence, and price and intensity of services explained 4.1%, 7.0%, and 24.1%, respectively. The rate at which these drivers contributed to spending variation in was different according to the payer, type of care, and health condition.

As for insurance coverage and median income, both factors were associated with service utilization, but the portion of Medicare with Medicare Advantage was tied to less utilization.

After analyzing the data, the study investigators concluded that, “In this cross-sectional study, variation in health care spending among US counties was largely related to increases in health service utilization. Understanding the drivers of spending variation in the US can help policymakers assess the allocation of health care resources.”

References

1. Johnson EK, Wojtesta MA, Crosby SW, et al. Varied health spending growth across US states was associated with incomes, price levels, and Medicaid expansion, 2000-19. Health Aff (Millwood). 2022;41(8):1088-1097. doi:10.1377/hlthaff.2021.01834

2. AcademyHealth Annual Research Meeting. Tracking US health care spending by cause and county: 2010–2019. June 30, 2024. Accessed January 2, 2025. https://academyhealth.confex.com/academyhealth/2024arm/meetingapp.cgi/Paper/66267

3. IOM (Institute of Medicine). Variation in Health Care Spending: Target Decision Making, Not Geography. The National Academies Press; 2013. doi:10.17226/18393.

4. Cutler D, Skinner JS, Stern AD, Wennberg D. Physician beliefs and patient preferences: a new look at regional variation in health care spending. Am Econ J Econ Policy. 2019;11(1):192-221. doi:10.1257/pol.20150421

5. Dieleman JL, Weil M, Beauchamp M, et al. Drivers of Variation in Health Care Spending Across US Counties. JAMA Health Forum. 2025;6(2):e245220. doi:10.1001/jamahealthforum.2024.5220