The More You Pay, the Better the Care? Think Twice
Economic View
December 17, 2006
By EDUARDO PORTER
EXPERTS have long been puzzled by the existence of large regional disparities in medical care in the United States. Even for diseases for which the appropriate treatment is widely accepted, doctors across the country take vastly different approaches, often leading to enormous expense without making any appreciable improvement in their patients’ health.
Consider heart attacks. Prescribing beta blockers immediately after a heart attack is a well-established, cheap and efficient treatment. In Iowa, nearly 80 percent of victims in 2000 received the drugs within 24 hours of a heart attack. In Alabama or Georgia, by contrast, fewer than 6 out of 10 patients received the drugs.
“What makes the lag in beta-blocker adoption puzzling is that the clinical benefits have been understood for years,” wrote Jonathan S. Skinner and Douglas O. Staiger, economists at Dartmouth, in a recent study about these regional patterns.
Congress has decided that some treatment decisions may be best taken out of doctors’ hands. In one of their last acts this year before adjourning, lawmakers passed a bill entitling doctors to a bonus from Medicare if they report data on the quality of their care, using criteria like whether they prescribe aspirin or beta blockers to heart attack victims. In the future, this data would permit Medicare to reward doctors who followed government guidelines.
Many doctors criticized the decision, saying it would impose a form of medicine by cookbook that could endanger patients. Still, some experts contend that this form of accountability is a necessary step to deal with inefficiencies that riddle the health care system and fuel much unnecessary spending on care.
Several new studies suggest that there is no relationship between the amount spent on treating a patient and the quality and outcome of the care.
Consider chronically ill elderly patients in the last two years of their lives. According to a comparison of hospitals across the country done by researchers at Dartmouth, if the patients die in a hospital in New York State, the average cost of those two years would be $38,369. In Florida, by contrast, it would be $29,604, while in Iowa it would be only $23,746.
To be sure, much spending on health care provides enormous benefits. A study published this year by Mr. Skinner, Mr. Staiger and Dr. Elliott S. Fisher of Dartmouth Medical School found that Medicare spending on hospital care for heart attack victims surged two-thirds from 1986 to 1996, after accounting for inflation. But the percentage of victims who were alive a year after their attacks also increased, though by just 10 percentage points, to roughly 68 percent.
The relationship — rising costs bringing increased benefits — has broken down recently. From 1996 to 2002, Medicare spending on treatments for heart attack victims increased about 14 percent, after inflation. But there was virtually no improvement in survival rates.
There is mounting evidence that the zeal to treat and spend may actually hurt patients. The study by Mr. Skinner, Mr. Staiger and Dr. Fisher found that hospitals in regions where spending grew fastest from 1986 to 2002 had some of the worst practices, in terms of providing tried-and-true therapies, and recorded the smallest gains in survival rates.
Treatment of heart disease underscores the deeply idiosyncratic nature of many choices made by America’s doctors and hospitals. Coupled with a fee-for-service system that encourages aggressive treatment, these choices stimulate health spending that provides little benefit to patients. “A lot of the innovation and spending growth are going into gray areas that are not helping people that much,” Mr. Skinner said.
But perhaps the most puzzling inefficiency in how doctors treat heart disease is not the spending on fancy yet ineffective therapies. It’s the lack of spending on treatments that have been known to work for years, like beta blockers.
“The biggest failure of the American health care system is not that we overuse stuff but that we underuse stuff,” said David Cutler, an economist at Harvard. Consider aspirin. It helps prevent formation of blood clots, and its widespread use has probably been the cheapest breakthrough in the history of heart disease treatment.
A study five years ago by Dr. Mark McClellan, who was to become the commissioner of the Food and Drug Administration, and Dr. Paul A. Heidenreich of the Veterans Affairs Palo Alto Health Care System in California, estimated that growing aspirin use explained more than a third of the decrease in the death rates of heart attack victims from 1975 to 1995.
Still, a Duke University study of about 32,000 patients with coronary artery disease who were treated from 1995 to 2002 found that only 83 percent took aspirin. And only 71 percent did so consistently.
The financial incentives in the health care system are part of the problem, experts say. These incentives encourage hospitals and clinics to provide more services, hire more specialists and install more devices. They shuttle patients from one specialist to the other — providing more-scattered care. All too often, when the patient leaves the hospital, nobody among the crowd of doctors takes responsibility for prescribing the beta-blockers. “The system rewards throughput and higher-margin services,” Dr. Fisher said. “This leads us inadvertently to waste and inadvertently to harm.”
He argued that hospitals and doctors must gather into bigger units that coordinate care smoothly — sharing medical records and responsibility for a patient’s overall health. They should provide information about treatments and outcomes. And, he said, Medicare must start paying for results, measured in terms of lives improved and extended and of value for the money.
Congress has taken a step in this direction. But changing entrenched practices is not easy.
MR. SKINNER and Mr. Staiger found an odd pattern in the regional propensities of doctors to prescribe beta blockers: it closely matched the propensities of farmers to embrace hybrid corn early in the 20th century.
Hybridization spread through Iowa’s cornfields as early as the mid-1930s. By contrast, in Alabama and Georgia it didn’t take hold until the late 1940s. In other words, the lag in the prescription of beta blockers is not simply a problem of the health care system. It also reflects regional attitudes about the adoption of new technologies, the study concluded. That problem could take generations to solve.
http://www.nytimes.com/2006/12/17/business/yourmoney/17view.html?_r=1&oref=slogin
Economic View
December 17, 2006
By EDUARDO PORTER
EXPERTS have long been puzzled by the existence of large regional disparities in medical care in the United States. Even for diseases for which the appropriate treatment is widely accepted, doctors across the country take vastly different approaches, often leading to enormous expense without making any appreciable improvement in their patients’ health.
Consider heart attacks. Prescribing beta blockers immediately after a heart attack is a well-established, cheap and efficient treatment. In Iowa, nearly 80 percent of victims in 2000 received the drugs within 24 hours of a heart attack. In Alabama or Georgia, by contrast, fewer than 6 out of 10 patients received the drugs.
“What makes the lag in beta-blocker adoption puzzling is that the clinical benefits have been understood for years,” wrote Jonathan S. Skinner and Douglas O. Staiger, economists at Dartmouth, in a recent study about these regional patterns.
Congress has decided that some treatment decisions may be best taken out of doctors’ hands. In one of their last acts this year before adjourning, lawmakers passed a bill entitling doctors to a bonus from Medicare if they report data on the quality of their care, using criteria like whether they prescribe aspirin or beta blockers to heart attack victims. In the future, this data would permit Medicare to reward doctors who followed government guidelines.
Many doctors criticized the decision, saying it would impose a form of medicine by cookbook that could endanger patients. Still, some experts contend that this form of accountability is a necessary step to deal with inefficiencies that riddle the health care system and fuel much unnecessary spending on care.
Several new studies suggest that there is no relationship between the amount spent on treating a patient and the quality and outcome of the care.
Consider chronically ill elderly patients in the last two years of their lives. According to a comparison of hospitals across the country done by researchers at Dartmouth, if the patients die in a hospital in New York State, the average cost of those two years would be $38,369. In Florida, by contrast, it would be $29,604, while in Iowa it would be only $23,746.
To be sure, much spending on health care provides enormous benefits. A study published this year by Mr. Skinner, Mr. Staiger and Dr. Elliott S. Fisher of Dartmouth Medical School found that Medicare spending on hospital care for heart attack victims surged two-thirds from 1986 to 1996, after accounting for inflation. But the percentage of victims who were alive a year after their attacks also increased, though by just 10 percentage points, to roughly 68 percent.
The relationship — rising costs bringing increased benefits — has broken down recently. From 1996 to 2002, Medicare spending on treatments for heart attack victims increased about 14 percent, after inflation. But there was virtually no improvement in survival rates.
There is mounting evidence that the zeal to treat and spend may actually hurt patients. The study by Mr. Skinner, Mr. Staiger and Dr. Fisher found that hospitals in regions where spending grew fastest from 1986 to 2002 had some of the worst practices, in terms of providing tried-and-true therapies, and recorded the smallest gains in survival rates.
Treatment of heart disease underscores the deeply idiosyncratic nature of many choices made by America’s doctors and hospitals. Coupled with a fee-for-service system that encourages aggressive treatment, these choices stimulate health spending that provides little benefit to patients. “A lot of the innovation and spending growth are going into gray areas that are not helping people that much,” Mr. Skinner said.
But perhaps the most puzzling inefficiency in how doctors treat heart disease is not the spending on fancy yet ineffective therapies. It’s the lack of spending on treatments that have been known to work for years, like beta blockers.
“The biggest failure of the American health care system is not that we overuse stuff but that we underuse stuff,” said David Cutler, an economist at Harvard. Consider aspirin. It helps prevent formation of blood clots, and its widespread use has probably been the cheapest breakthrough in the history of heart disease treatment.
A study five years ago by Dr. Mark McClellan, who was to become the commissioner of the Food and Drug Administration, and Dr. Paul A. Heidenreich of the Veterans Affairs Palo Alto Health Care System in California, estimated that growing aspirin use explained more than a third of the decrease in the death rates of heart attack victims from 1975 to 1995.
Still, a Duke University study of about 32,000 patients with coronary artery disease who were treated from 1995 to 2002 found that only 83 percent took aspirin. And only 71 percent did so consistently.
The financial incentives in the health care system are part of the problem, experts say. These incentives encourage hospitals and clinics to provide more services, hire more specialists and install more devices. They shuttle patients from one specialist to the other — providing more-scattered care. All too often, when the patient leaves the hospital, nobody among the crowd of doctors takes responsibility for prescribing the beta-blockers. “The system rewards throughput and higher-margin services,” Dr. Fisher said. “This leads us inadvertently to waste and inadvertently to harm.”
He argued that hospitals and doctors must gather into bigger units that coordinate care smoothly — sharing medical records and responsibility for a patient’s overall health. They should provide information about treatments and outcomes. And, he said, Medicare must start paying for results, measured in terms of lives improved and extended and of value for the money.
Congress has taken a step in this direction. But changing entrenched practices is not easy.
MR. SKINNER and Mr. Staiger found an odd pattern in the regional propensities of doctors to prescribe beta blockers: it closely matched the propensities of farmers to embrace hybrid corn early in the 20th century.
Hybridization spread through Iowa’s cornfields as early as the mid-1930s. By contrast, in Alabama and Georgia it didn’t take hold until the late 1940s. In other words, the lag in the prescription of beta blockers is not simply a problem of the health care system. It also reflects regional attitudes about the adoption of new technologies, the study concluded. That problem could take generations to solve.
http://www.nytimes.com/2006/12/17/business/yourmoney/17view.html?_r=1&oref=slogin
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