More may not always be better in health care

John W. Schoen Senior producer • Profile • E-mail

Among the dozens of moving parts and hundreds of players, one corner of the health care debate is focused on an intriguing finding. The cost of caring for a patient in one part of the country can be triple what it costs for the same care, apparently with the same quality, in another. 

Why? That's the $1 trillion question at the heart of the Obama administration’s goal of expanding health care to the almost 50 million Americans without health insurance.

By applying “low-cost” practices to “high-cost” areas, the White House is hoping to slow the ruinous rise in medical costs and save the hundreds of billions needed to pay for expanded coverage — without sacrificing the quality or availability of health care.

The idea has already won support from some major health care providers.

“He’s really hit on something critical,” said Michael McCallister, CEO of Humana, one of the nation’s largest health insurers. “If you look around the nation, the cost of treating people varies dramatically, depending where you are. There’s really no rhyme or reason for that or rationale for it. It’s a big opportunity for getting dollars out of this system to be reapplied in another fashion.”

It’s a bold gamble, too. If health care coverage is expanded — at an estimated price tag of $1 trillion — without savings, the new system will simply add more patients and accelerate the rise in costs. That's something the nation can ill afford as it runs up multitrillion-dollar deficits to pay for programs aimed at reviving the economy, saving banks and rescuing automakers.

On the other hand, trying to simply cut spending without achieving efficiency gains could force cuts in services, rationing of access and lower quality care.

That’s why the White House is paying close attention to recent research into widespread variations in health care costs between regions. Most of the research is coming from the Dartmouth Atlas Project, which has mapped health care spending patterns from 1996 through 2006 in 306 regions of the country, based on Medicare reimbursements. (See map at top of story.)

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The results have challenged the widely held belief that more medical care is better care. The “evidence suggests that the quality of care and health outcomes are better in low-spending regions, and there have been no greater gains in survival in regions with greater spending growth,” according to a February article on the study in the New England Journal of Medicine.

Dr. Elliot Fisher, one of the principal investigators of the study, says part of the problem is that illnesses that involve the greatest variation in discretionary care — how many tests to order, how aggressively to treat — create some of the biggest variations in cost. By developing better scientific evidence on the effectiveness of specific tests and treatments, Fisher argues, doctors can reduce the overuse of medical care without sacrificing the quality of care.

“We need to strengthen evidence (on effectiveness), but we also need to create systems that will provide us feedback on how we practice medicine,” he said.

Fisher said the advance of specialized medicine also has created the potential for duplication of care if specialists don’t operate as a team when caring for a patient.

“The answer really does lie in encouraging physicians to work as members of groups, using integrated systems, which can be accountable to the overall cost of care to their patient,” he said. “Where we have good evidence how best to manage a patient, such systems can do a remarkably good job at improving outcomes and lowering costs.”

The Dartmouth researchers also identified incentives in the current fee-for-service payment system that can create big differences in cost with little difference in outcomes. For example, a hospital that buys the latest imaging technology has to look for ways to keep the machine busy to pay for it. If the hospital does not buy the machine, it risks losing business to a neighboring hospital.

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