NEW YORK (Money Magazine) - In many ways, we're clearly getting more bang for our health-care buck. But the fact that some high-cost treatments are worth it doesn't mean that every dollar we spend pays off. In fact, according to one influential group of researchers, so many patients are being overtreated that it might be possible to spend almost a third less on Medicare and still get similar results.
"Across hospitals that are very similar in quality, people can be treated in very different ways," explains Dr. Elliott Fisher, a lanky 51-year-old Dartmouth professor who also works part time as an internist in the veterans' hospital in White River Junction, Vt. "You can get the same technical care, the same discrete treatments. The same chemo, the same careful monitoring of blood tests," he says. "But in one setting you'll get twice as much care -- more physician visits and more specialists involved in your care."
| America's healthcare mythology
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I visited Fisher this summer at Dartmouth's Center for Evaluative Clinical Sciences, which during the past 14 years has been studying the weird regional variations in how doctors in the U.S. decide what care their patients need. For example, even after adjusting for obvious demographic differences, annual Medicare reimbursements in 1996 added up to $8,414 per enrollee in Miami vs. just $3,431 in Minneapolis. Earlier this year, Fisher and a team of five researchers produced a study that suggests Minnesotans might actually get the better care.
They come to this conclusion in a roundabout way, so bear with me. The Fisher group first split America's 306 hospital regions into five groups according to their "spending intensity." This determination was based on how much Medicare spent (again, after adjusting for race, sex and age, plus local prices) on patients in the last six months of their lives. Since the patients in question all died, any differences in spending probably can't be explained by the fact that, for example, people in Louisiana are usually sicker than people in Colorado. Those differences turn out to be huge: The average patient in the highest-spending districts cost Medicare some $5,000 more than one in the most conservative districts.
But Fisher and company weren't really interested in care for the dying per se; they wanted to know whether systems that spend a lot get better results. They already knew that the amount of care doctors and hospitals give to their patients correlates with what's available. Big-spending towns have more of almost everything: more hospital beds, more teaching hospitals and more medical specialists. (In the last six months of life, the average Miami senior sees specialists 25 times vs. four in Minneapolis.)
Intuitively, you'd guess that you would be better off getting sick in a high-spending city. But you probably wouldn't -- not, at least, if you are on Medicare and have a heart attack, colon cancer or a broken hip, the three conditions the researchers studied. It turns out that, after adjusting for health and socioeconomic status, patients in all three groups have a higher risk of dying within five years in the places that spend more money.
What's going on? As Fisher admits, this study can't show what high-spending areas are doing wrong. But it supports the notion that doctors base many decisions on factors other than strict medical need.
And that's not only because they're paid more for doing more. When they're making what Fisher calls "gray area" decisions -- "Well, you have a headache, so should you get the MRI today or see how you feel tomorrow?" -- it's often easier for them to book that test or call in specialists if they're available. And in places like Miami, they usually are.
Unfortunately, as the mortality stats hint, bad economics is sometimes also bad medicine. After all, every extra day you spend in the hospital, every new test you take and every extra doctor you see gives you one more chance to become the victim of a medical foul-up.
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