By Floyd J. Fowler Jr, PhD; Patricia M. Gallagher, PhD; Denise L. Anthony, PhD; Kirk Larsen, MA; Jonathan S. Skinner, PhD
JAMA
May 28, 2008
Context: Wide variations in Medicare expenditures exist across regions, but little is known about whether beneficiaries residing in low-expenditure regions perceive receiving lower-quality care than those in high-expenditure regions.
Objective: To evaluate how Medicare beneficiaries’ perceptions of their health care are related to per capita expenditure in the areas where they live.
Conclusion: In this representative sample of Medicare beneficiaries, no consistent association was observed between the mean per capita expenditure in a geographic area and the perceptions of the quality of medical care of the people who live in those areas.
Our survey respondents differed in their rates of use of health care in ways that parallel the aggregate analyses previously reported by Fisher et al. There is little basis for attributing those differences to access to care, concerns about costs, or the health status of the populations. Most important, the results taken together document that spending more on medical care does not improve patients’ perceptions of the medical care they receive. On average, those in the lower-expenditure areas reported no more perceived unmet needs for care and a perceived quality of ambulatory care similar to that in high-expenditure areas; furthermore, they rated the overall quality of their health care at least as highly as those in high-expenditure areas.
Ultimately, the culture that develops in particular medical communities seems to be an important factor in how much medical care is delivered and how much it costs. This study suggests that, should fundamental changes in the structure of the US health care system occur so that the lowest-expenditure quintile is viewed as the benchmark, the fraction of patients who view their care as inadequate or constrained will not, in the long term, increase above current levels. Instead, we suspect that the limiting factor in restraining cost growth or in fundamental reform will be the extent to which the medical community will be able to adjust to new standards for what constitutes appropriate medical practice.
http://jama.ama-assn.org/cgi/content/full/299/20/2406
And…
Spending on Medical Care
More Is Better?
By Gerard F. Anderson, PhD; Kalipso Chalkidou, MD, PhD
JAMA editorial
The article by Fowler et al adds to the discussion concerning whether the economic principles of “more is better,” diminishing returns, and comparison with others apply in health care. When patients are able to access good-quality objective information on the risks and benefits of the various treatment alternatives, they do not necessarily choose more aggressive or more costly interventions. Currently, the United States spends more than twice as much as most other industrialized countries on health care services, some regions of the United States spend twice as much as other regions of the country, and some institutions or clinicians are twice as expensive as others. In terms of outcomes and satisfaction, the United States may have reached the position of diminishing returns for spending on medical care.
http://jama.ama-assn.org/cgi/content/full/299/20/2444
Comment:
By Don McCanne, MD
There are now a plethora of studies that demonstrate that the current lowest-expenditure quintile may serve us well as the benchmark for optimal health care spending in the United States in that further spending produces diminishing returns.
That does not mean that we should establish a health care budget funded at that lower level and then use a meat cleaver approach to slash spending. We are seeing that in state Medicaid programs, and it is a disaster.
It does mean that we need fundamental reform of our health care financing system so that we can achieve greater value in our health care purchasing. When you look at the reform proposals of the presidential candidates, their cost containment recommendations would have very little impact in controlling spending because they fail to address the major waste resulting from our flawed, fragmented system of financing health care.
What fundamental reform do we need? Much has been said about the hundreds of billions of dollars that would be saved each and every year by simply changing to a single payer health care financing system, so we won’t address it further here, other than to state that it is essential that we make that change if we are serious about health care financing reform.
This article and others, especially the Dartmouth studies, reveal that there is a great potential for reducing wasteful spending so that the funds can be redirected to those individuals with unmet health care needs. The easier step would be to realign incentives in order to enhance our primary care infrastructure – a model that has been demonstrated to provide care at lower costs without impairing and sometimes actually improving the quality of care. Much of the cost savings is due to a reduction in the flat-of-the-curve care characterized by diminishing returns.
The more difficult step would be to identify the care that is producing diminishing returns, and, again, realign incentives to discourage wasteful, poor quality care. That won’t be easy, but it would be possible within the framework of a single payer national health program. It is almost impossible now with our fragmented system of financing care. Even Medicare would have difficulty putting into place policies that would achieve the goals of a more efficient health care delivery system because it controls spending for only about 13.7 percent of 304 million Americans and can have only a very limited impact in improving the health care delivery infrastructure.
A single national health program would have the buying power to reduce the administrative waste, to reinforce our primary care infrastructure, and to reduce excesses in the flat-of-the-curve care. Based on the current political climate, it is likely that both the Democratic and Republican platforms will fall far short on these goals.
That is not to say that there are no differences between the parties. One party understands that the government must play a major role in health care financing. The other would prefer to turn rely more heavily on the marketplace. A single payer national health program functions well in only one of these scenarios.
