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Less Health Care Can Be Better for Elderly (KEVIN FREKING, 5/16/06, AP)

The amount of money Medicare spends on chronically ill patients varies substantially from state to state, with nearly $40,000 spent per patient in New Jersey and the District of Columbia, but less than $24,000 spent in states such as Indiana and West Virginia.

Yet, there is no indication that patients in the states with the highest spending are better off than those in states with the lowest spending. In fact, the reverse seems to be true, according to researchers at Dartmouth Medical School.

Their findings, released in a report Tuesday, could have important policy implications as the nation struggles with the soaring expense of its Medicare program.

"We must fundamentally redesign the way we care for chronically ill Americans," said the authors of the report. "We must reward, rather than penalize provider organizations that successfully reduce excessive care and develop broader strategies for managing patients with chronic illness."