Health care marketplace creates wasteful, excess capacity
BMJ
March 13, 2004
Use of hospitals, physician visits, and hospice care during last six months of life among cohorts loyal to highly respected hospitals in the United States
By John E Wennberg, et al
Academic medical centres in the United States with reputations for excellence differed dramatically in the care they provided to patients during the last six months of life.
…physicians have been shown to adapt their decisions about admission and discharge to the availability of intensive care unit beds, admitting more patients with lower severity of illness and extending their length of stay when more beds are available. In the light of this evidence, the likely explanation for the variations in acute hospital care and physician visits is variation in bed and workforce capacity relative to the size of population loyal to the 77 hospitals.
http://bmj.bmjjournals.com/cgi/content/full/328/7440/607
And…
The New York Times
March 13, 2004
An M.R.I. Machine for Every Doctor? Someone Has to Pay
By Reed Abelson
…doctors, their traditional sources of income squeezed, discover a new one: diagnostic imaging.
Instead of sending patients to a radiologist or one of four local hospitals, doctors in Syracuse have been particularly aggressive about installing imaging equipment - particularly M.R.I. machines - in their own offices.
There are signs that more machines may translate into too much imaging. Excellus points to data that suggest use of M.R.I.’s in Syracuse is two-thirds higher than in Rochester, for example, and higher than the national average.
http://www.nytimes.com/2004/03/13/business/13IMAG.html?8br
And…
Health Affairs
March/April 2004
Growth Of Single-Specialty Medical Groups
By Lawrence P. Casalino, Hoangmai Pham and Gloria Bazzoli
Using site-visit data from the Community Tracking Study, we show that specialists are increasingly forming large single-specialty medical groups, particularly in orthopedics and cardiology, where new technologies have increased the number of diagnostic imaging and surgical services that can be
provided in outpatient settings.
CTS site visits have provided little evidence that single-specialty groups, to date, are developing many of the organized quality-improving and cost-reducing processes to be expected in a focused factory. The current system pays specialists for increasing, not decreasing, the quantity and complexity of services provided and does not pay them for improving quality. Previous research has shown that physicians who own ancillary facilities tend to increase the amount of ancillary services they provide. Health plan executives at many CTS sites believe that increased specialist use of ancillary services is increasing health care costs.
http://content.healthaffairs.org/cgi/content/full/23/2/82
Comment: There is now ample evidence in the health policy literature to show that excess capacity in the health care system results in over-utilization, defined as an increase in utilization without a reasonably commensurate improvement in health care outcomes.
It is important to establish an optimum level of capacity ensuring that services will be there when needed but not enabling excessive utilization. A single payer system separates budgets for operation of the health care system from budgets for capital improvements, precisely for these reasons.
When we depend on market forces to establish capacity, the decision makers
head for the money. Thus, as Wennberg has shown in another study, Boca Raton
has a capacity that allows about a 30% excess in the level of services, but
without a demonstrable improvement in outcomes.
A single payer system not only establishes fairness in funding and in allocation of resources, but it also allocates resources more effectively. Will someone explain why we continue to support our current expensive but wasteful, less effective, and inequitable system when we know how to make it better?