More Isn’t Better In Health Care Spending

Spending on health care varies wildly from one part of the country to another. But there is no relationship between spending and good care.

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Near the end of the magazine article about the cost of health care that the New York Times said “has become required reading in the White House,” the author, Atul Gawande, considers Grand Junction, Colorado. Grand Junction is not exactly rural, but it’s a small city surrounded by a whole bunch of big country. 

Grand Junction is also a model of how health care can be delivered both well and (relatively) inexpensively. 

Gawande, a doctor writing for The New Yorker magazine, explains that Grand Junction has some of the lowest health care costs in the country. The reason, according to Dr. Gawande, is that doctors in the western Colorado town cooperated. They met regularly about prices and patterns of treatment. When the Colorado doctors found poor practices — too many back operations, for example — they worked to change how medicine in their town was being practiced. The Grand Junction docs created a community-wide electronic records system, sharing notes, tests and treatment histories on patients.

The result: “Problems went down. Quality went up. And costs ended up lower than just about anywhere else in the United States.”

Dr. Gawande’s article is based on a long-running research study of health care costs conducted by doctors at Dartmouth University. Over the past two decades, the Dartmouth researchers have found that health care costs vary markedly from place to place across the United States.

It’s true that some people are sicker than others. Also, some procedures are more expensive in some parts of the country than others. But even when these variables and many more are taken into account, there is still a twofold difference in health care spending per person from from the most expensive region in the United States to the cheapest. Medicare spends twice as much to care for people in New York as it does for people in Hawaii.  

(The map at the top of the story shows the variety in average costs per person across the country. The figures come from Medicare. The geography maps hospital regions. The green parts of the country have lower average health care costs; blue areas, have higher costs. There is no rural/urban breakdown.)

Dartmouth Atlas of Health Care
Some regions of the U.S. have more primary care doctors than others.

There is no relationship between spending and quality of health care, however. “The findings are remarkably consistent,” according to a recent report from Dartmouth; “higher spending does not result in better quality of care, whether one looks at the technical quality and reliability of hospital or ambulatory care, or survival following such serious conditions as a heart attack or hip fracture.” Patients in high-cost areas receive more procedures and tests, they see more specialists and they spend more time in hospitals. But they are no healthier. Simply, the Dartmouth doctors report, “More isn’t always better.”

For example, it costs Medicare 50 percent less when patients are treated at the world-famous Mayo Clinic in Rochester, Minnesota, than when similar patients are treated at other prestigious hospitals. The highest cost area in the country — a town profiled in Dr. Gawande’s article — is McAllen, Texas. Medicare spent $15,000 on each Medicare enrollee in McAllen in 2006, twice the national average. The country would have saved millions by treating all these people at the Mayo Clinic.

The Dartmouth studies find there is a “paradox of plenty” in health care. People who live in areas where there are more doctors, specialists, hospitals and medical equipment experience more “shortages” of health care than those who live in less well-equipped regions. 

“Remarkably, in regions where the numbers of hospital beds and specialists are greater, physicians are more likely to have difficulty getting their patients into the hospital or getting a specialist referral,” the Dartmouth researchers have found. “Access is worse where there are more medical resources….”

That is because when there are more hospital beds available, people spend more time in the hospital. In high spending regions, people spend more time in intensive care, get more tests, see more specialists and are hospitalized more. But their care is no better than in low-spending regions.

Dartmouth Atlas of Health Care
Specialists are not evenly distributed around the country. The Dartmouth researchers found that the regions with the most specialists also had the longest waits for patients to see specialists.

Oddly, the more doctors and hospitals you have in your community, the harder it is to get the care or specialist you need. Massachusetts has the greatest supply of both primary care and specialist physicians in the country, but the local medical society reports a “critical” shortage of physicians.

Here is a map of the distribution of primary care physicians. The upper Midwest does seem to be a region with a greater supply of primary care docs.

And here is the distribution of specialists.

The Dartmouth studies have their critics. The New York Times reported here that U.S. Senators from high cost states are worried that they will suffer if their facilities are forced to spend at rates closer to the national average. Sen. John Kerry, from high-cost Massachusetts, told the Times that there “is too much uncertainty about the Dartmouth study to use it as a basis for public policy.”  

Maggie Mahar, at a blog hosted by the Century Foundation, explains why the Dartmouth studies hold up under scrutiny. Mahar says the point of Gawande’s article and the Dartmouth studies is that health care should be paid for not in the volume of services but according to the quality of care. 

“This is the heart of the Dartmouth Research, and here there is a consensus,” Mahar wrote. “More care is not better care. Often, it is worse. Spending more is not helping patients. We must squeeze the waste out of the system.”

Kaiser Health News, meanwhile, interviewed several people involved in the health care debate about the Dartmouth studies and the New Yorker article “now being called one of the most influential health care stories in recent memory.” 

We have yet to see how these geographical differences play out in terms of rural America. Rural areas constantly cite doctor shortages. Given the Dartmouth findings, however, we have to wonder if there is a similar shortage in care? Also, are rural places perhaps better at producing the kind of cooperative medicine exemplified in Grand Junction? The Dartmouth studies don’t answer these questions.

We do know that geography — especially rural and urban geography — matters. And what these maps and the Dartmouth studies do reveal is that any health care reform needs to account for differences in place. “Geography becomes destiny for Medicare patients,” according to Dartmouth researchers.

What, then, is rural America’s fate?

 

 

Topics: Health
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