Variation between End-of-Life Health Care Costs in Los Angeles and San Diego: Why Are They So Different?

Context: Small area differences in health care use between Boston, Massachusetts, and New Haven, Connecticut, are well known. However, we do not know whether factors believed to account for these variations explain differences between other geographic areas. Objective: To explore differences in health care use between the California counties of Los Angeles (LA) and San Diego. Method: Medicare data were obtained form the Dartmouth interactive website. In addition, hospital-level data were obtained for the California Office of Statewide Health Planning and Development (OSPHD). Health outcomes and self-reported disease prevalence were estimated from the California Health Interview Survey (CHIS). Results: Physician supply was comparable between LA and San Diego. Fees per unit service were also equivalent. Hospital beds beds per 10,000 population were 35% higher in LA. Intensity of service use, particularly during the last 2 years of life, was significantly higher in LA, and costs were dramatically higher. Most of the differences were explained by discretionary hospital admissions, end-of-life care, and lower use of hospice care. Quality indicators favor San Diego. Conclusions: Medical care, particularly at the end of life, is significantly more expensive in LA than in San Diego, yet quality measures tend to favor in San Diego. Non-emergent hospital admissions and inpatient care at the end of life are important contributors to the cost differences. There is little reason to believe that the greater spending for health care in LA results in better patient outcomes.