Louise Shiner writes,

geographic variation in health spending does not provide a useful way to examine the inefficiencies of our health system. States where Medicare spending is high are very different in multiple dimensions from states where Medicare spending is low, and thus it is difficult to isolate the effects of differences in health spending intensity from the effects of the differences in the underlying state characteristics. I show, for example, that previous findings about the relationships between health spending, the share of physicians who are general practitioners, and quality, are likely the result of omitted factors rather than the result of causal relationships

Russ Roberts often asks whether any empirical work in economics changes one’s mind. I would say that the Dartmouth studies changed my mind about health care spending in the U.S., convincing me that much of it is “wasted” (I prefer “spent on procedures with high costs and low benefits”). However, there have always been those who doubted the validity of those studies, and this appears to be a particularly strong critique.

On the other hand, see Austin Frakt’s overview of the literature.