If You Live in These Areas, Your Doctor Could Be Ripping You Off

Where you live can nearly double how much you're spending on medical care, as well as how much care your doctor orders.

A patient in Miami, Florida costs Medicare about $13,524 a year... while one in Honolulu, Hawaii costs around $6,900, according to the Dartmouth Atlas of Health Care.

A recent study by three economists at the Massachusetts Institute of Technology and Stanford University examined why this phenomenon is so important to your health... and your wallet.

The central question of the study is why patients in parts of Louisiana, for example, would get more treatment than a patient in Oregon...

Is it because the patients demand it? Or do the doctors prescribe it?

Researchers tracked Medicare patients that moved from one area to another and found that 40%-50% of the difference in health care provided came from patient demands for more treatment or extra trips to the doctor. This additional cost even followed them when they moved.

Most Active Hospital Referral Regions

Region Costs*
Miami, FL $13,524
Monroe, LA $12,614
McAllen, TX $12,525
Alexandria, LA $12,030
Dearborn, MI $11,869


Least Active Hospital Referral Regions

Region Costs*
Grand Junction, CO $6,763
Anchorage, AK $6,875
Honolulu, HI $6,900
Eugene, OR $7,067
Medford, OR $7,079
Source: Dartmouth Atlas of Health Care
*2013 Medicare reimbursements. Adjusted for price, age, sex, and race.

When you look at things like diagnostic and imaging tests – where the decision to order comes from the doctor and not the patient – the additional cost is even greater.

Many parts of our health system suffer from over-testing and overtreatment.

In particular, we've warned that tests for prostate cancer and pancreatic cancer are often unnecessary and inconclusive. These tests increase costs and can be stressful for the patient.

Blind obedience to everything your doctor tells you is dangerous... and potentially deadly.

Doctors should do what science and medicine dictate. But this study shows there are other factors at work.

While the numbers can't tell us exactly why doctors in some areas act differently than others, we have some ideas... It could be that doctors do what their immediate peers do. And there can be differences in regulations, or different practices put in place by the local health institutions.

One thing's for sure, you want your doctor treating you based on your health, not what area you live in.

If you're in a major city, you may be in a high-treatment area. You can download a spreadsheet from the Dartmouth Atlas of Health Care that shows whether your area has high or low spending. (Look at the "claims-based" HRR level data.)

We're all vulnerable to peer pressure and other influences that change the decisions we make. Make sure your doctor isn't...

When your doctor orders a test, ask him why. Ask him about the costs, the possibilities of a false positive, and how the test results will change your treatment.

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What We're Reading…

  • Scotland's chief medical officer is fighting back against overtreatment.