Reducing Geographic Variation in Medicaid Spending

During periods of economic recession, Medicaid programs face the twin pressures of rising enrollment and falling tax revenues and thus are tasked with finding ways to cut costs without harming quality of care. The Pennsylvania Medicaid program is no different, facing increasing costs for healthcare, including for prescription drugs. Studies of geographic variation in prescription drug spending can help identify opportunities for cost-savings. This project brought a scientific focus on geographic variation in prescribing to a policy problem of great importance to every state – prescription drug costs. Using PA Medicaid pharmacy and medical claims along with information on the prescribing physicians, the project described geographic variation in total drug spending and spending for antipsychotics and diabetes medications, determined whether the variation in drug spending was driven by the volume of drugs dispensed or their cost, and made policy recommendations to address variation in the Medicaid program.


Gordon, A. J., Ciganic, W. H. L., Cochran, G., Gellad, W. F., & Donohue, J. M. Characteristics of buprenorphine opioid agonist treatment in a longitudinal U.S. Medicaid population. Drug & Alcohol Dependence, 146, e126.