Medicare and Private Insurance Variations in New Medical Technology: The Case of Drug Eluting Stents

IMPORTANCE: Little is known about the geographic and hospital variations of the new medical technologies in Medicare. Even less is known about these variations for the privately insured. OBJECTIVE: To examine geographic and hospital variations in the diffusion of drug eluting stents, comparing Medicare and privately insured populations. DESIGN: Retrospective analyses of discharges from the State Inpatient Databases for 11 states (2004–2005) supplemented with data on hospital characteristics from the American Hospital Association Annual Survey. SETTING/PARTICIPANTS: Study sample included discharges with percutaneous coronary intervention (PCI) procedures that involved a cardiac stent. EXPOSURE: Insurance type: Medicare versus private insurance. MAIN OUTCOME: Use of a drug eluting stent during the PCI was our outcome variable. We estimated linear probability models at the discharge level that related our outcome variable to patient and hospital characteristics separately for Medicare and private insurance. To examine variations across hospital referral regions (HRRs) and across hospitals, our models included HRR and hospital indicators respectively. RESULTS: Our analysis included 390,649 records (237,991 Medicare, 152,658 private insurance). We found large HRR variations in the use of drug eluting stents in 2004 for both payer types, the year after drug eluting stents were approved (adjusted CoV: 0.35 (Medicare); 0.24 (Private Insurance)). We also found large hospital variations in 2004 (adjusted CoV: 0.32 (Medicare); 0.29 (Private Insurance)). Between 2004 and 2005, adjusted HRR and hospital variations decreased across both payer types, suggesting that practice styles converged as the drug eluting stents diffused and became more common. Finally, adjusted drug eluting stent rates were highly correlated both at the HRR and hospital level across payer types. CONCLUSION: Our findings are consistent with the hypothesis that private insurance closely follows the lead of Medicare in terms of medical technology coverage and reimbursement.