It is often observed wryly that Americans have more interest in the well-being of their automobiles and pets than their own health. The challenges of activating patients to manage diet, lifestyle, and chronic conditions are well documented, and the accompanying costs of chronic illness are even more thoroughly characterized. The threats these pose to health reform, however, are poorly understood.

As we confront the best possibility of health care reform in the last 40+ years, it is important for policymakers to dwell on tools that can address this dilemma and support active, successful collaboration between patients and providers to manage health and health outcomes. We have the tools to achieve this at hand, but public expectations of health care and the incentive structure confronting providers foster apathy and even resistance instead of transformation.

Reform plans circulated to date have emphasized improved access to care for the uninsured and implementation of electronic medical records (EMRs). Both are laudable goals. Neither carries the transformational vision that is required to bring the outcomes achieved in line with the investment made on health care in the U.S. This is because neither of these policy goals has any incentives for improved effectiveness — actually accomplishing the desired results — or efficiency — doing so at less cost — inherent in their implementation. Read the rest of this entry »

Editor’s Note: Dr. Patchin wrote the blog post below in her official capacity as Chair of the Board of Trustees of the American Medical Association.

Health Affairs recently published an interview with Kerry Weems, former acting administrator of the Centers for Medicare and Medicaid Services. In the interview, inaccurate statements were made about the role of the AMA/Specialty Society RVS Update Committee (RUC), which advises CMS regarding the relative levels of reimbursement for different medical procedures performed by physicians. Read the rest of this entry »

While the most visible national health reform fight at the moment focuses on a public plan option for people covered through health insurance exchanges (or gateways), a quieter debate is brewing over whether coverage for low-income people should be achieved through Medicaid expansions or subsidies to purchase insurance through an exchange. For example, the Senate Finance Committee’s coverage options paper indicated interest in expanding Medicaid coverage for people with incomes up to 100 percent or 150 percent of the federal poverty level, which would particularly help low-income parents and childless adults.

Currently, the median income eligibility level for parents in Medicaid is 68 percent of poverty, or about $12,000 for a family of three, and only six states provide Medicaid coverage for poor childless adults, although a few additional states provide more limited benefits. However, the Senate Finance Committee also suggested an alternative: that low-income people might be assisted via subsidies for insurance bought from an exchange. What makes the most policy sense? Read the rest of this entry »

Editor’s Note: Below is the transcript of a Health Affairs Blog Roundtable on Atul Gawande’s New Yorker article on McAllen, Texas, and variations in health care costs. The roundtable used the article as a jumping-off point for a wide-ranging discussion on the policy implications of cost variations, delivery system reform, and other topics. Participants included Robert Berenson, an Institute Fellow at the Urban Institute; Elliott Fisher, Director of Health Policy Research at Dartmouth’s Center for the Evaluative Clinical Sciences; Robert Galvin, Director of Global Health at General Electric (GE); and Gail Wilensky, Senior Fellow at Project HOPE. The roundtable was moderated by John Iglehart, Founding Editor of Health Affairs.

JOHN IGLEHART: The subject of the first thematic issue that Health Affairs published in 1984 was variations in clinical practice patterns. When I met Jack Wennberg for the first time at the Pooks Hill Holiday Inn and suggested this to him, Health Affairs was virtually an unknown journal — that was 25 years ago.

Obviously, the variation theme has been played many a time in the policy community and the health services research community and the like, but I think we’ve all been struck by the impact that the Gawande article has had in the general public community and among elites. Elliott, how have you seen and measured impact from your end? I’m sure you’ve heard from a variety of people about it. As I understand it, the president read the Gawande article and it was discussed at a White House meeting a couple of weeks ago. Read the rest of this entry »

Editor’s Note: In the post below, Amitabh Chandra responds to criticisms of the Dartmouth Atlas and offers his vision of the lessons of the Dartmouth findings on variations in health care costs and practice styles. Watch the Blog tomorrow for a roundtable discussion on Atul Gawande’s New Yorker article on McAllen Texas and the policy implications of the Dartmouth work. Roundtable participants will include Robert Berenson, Elliott Fisher, Robert Galvin and Gail Wilensky.

Since 1973, when Jack Wennberg and Alan Gittelsohn first documented geographic variation in health care, researchers at Dartmouth and their collaborators have compiled a large literature that helps us to understand the phenomenon of regional variation in health care utilization, and its uncertain link with patient outcomes. Over the past three decades, Jack’s pioneering analysis has been replicated at the level of states, regions, cities, hospitals, and even hospitals within regions. It has been examined in different types of patients: aged, newborn, medical, surgical, and the chronically and acutely ill. More than 100 peer-reviewed publications support the finding that more health care spending does not automatically translate into better outcomes, that improvements in health are often caused by lower-cost interventions, that cost growth in health care originates from the use of technologies that are beneficial in some patients but offer great scope for overuse in others, and that there is tremendous geographic variation in the efficiency of the local delivery system that is not explained by patient health, preferences, or malpractice pressure. The last point is the most important one, for it says that regardless of whether the association between spending and outcomes is positive, flat, or negative, there are plenty of providers who’re able to deliver high-quality care without being high-cost suppliers of care. Read the rest of this entry »

Federal support for graduate medical education (GME) training positions has been capped for more than a decade and it is no secret that the country’s teaching hospitals are restive. They want “more cap.” A number of bills have been introduced in the House and Senate proposing an increase in the Medicare funded GME cap by fifteen percent, or roughly 15,000 positions. These proposals are an alluring Siren song but they will not be good for health care reform or for the country.

What could be wrong with more residents?

To answer this question, it is important to understand the background of federal GME support. Residency training programs have enjoyed generous Medicare funding for more than two decades. In 2007, Medicare paid hospitals more than $8.6 billion in support of GME based on formulas for “direct” medical education (costs such as resident salaries and teaching time) and “indirect” medical education (non-specific hospital costs associated with teaching hospitals.) In 2007, approximately 89,300 residencies were funded under this system making the average Medicare per resident payment an astonishing $96,000.

Not surprisingly this system is enormously popular with teaching hospitals since it represents a large and predictable funding stream based on the number of residents they employ – and employ is the operative word. Residents are learners, to-be-sure, but with their 80 hour weeks, they are also valuable and inexpensive skilled labor. Medicare GME funds make the resident a mini revenue center. Read the rest of this entry »

Editor’s Note: Health Affairs has recently published two studies looking at the association between hospital costs and quality. The first, by Ashish Jha and coauthors, appeared in our May-June issue, and the second by Laura Yasaitis, Amitabh Chandra, and coauthors, was published online.

Variations in spending and intensity of care, and the effects of these variations on quality and outcomes, have become a major focus of the current health reform debate. Therefore, the Health Affairs Blog asked Jha and Chandra to each describe the major findings of the two studies, and then to explain whether they viewed the studies as consistent with each other or as contradictory. Jha’s response is below and Chandra’s response is here.

The two researchers touch on differences between the methods and conclusions of the two studies. However, both researchers appear to essentially agree that, in Jha’s words, “unlike most sectors of the U.S. economy, where we usually have to make a cost-quality trade-off, no such sacrifice is likely to be necessary in the health care sector. There is ‘plenty of fat’ that can be removed to identify the high-quality, low-cost institutions.”

We examined whether hospitals that cost more provided better care than hospitals that had lower risk-adjusted costs. We found no relationship between risk-adjusted costs and patient outcomes but did find a small but consistent relationship between risk-adjusted costs and somewhat better clinical care. For those who have assumed that “you get what you pay for,” our findings are largely disappointing: hospitals that spend more don’t seem to have better outcomes and have only marginally better quality.

Why we did this study

High costs and variable quality are two of the main challenges facing clinical leaders and policymakers. There have been very few systematic examinations of whether health care providers that spend more money on their patients produce better outcomes (as one might imagine from other industries). We sought to determine whether this hypothesis had any validity in the hospital sector. Read the rest of this entry »

Editor’s Note: Health Affairs has recently published two studies looking at the association between hospital costs and quality. The first, by Ashish Jha and coauthors, appeared in our May-June issue, and the second by Laura Yasaitis, Amitabh Chandra, and coauthors, was published online.

Variations in spending and intensity of care, and the effects of these variations on quality and outcomes, have become a major focus of the current health reform debate. Therefore, the Health Affairs Blog asked Jha and Chandra to each describe the major findings of the two studies, and then to explain whether they viewed the studies as consistent with each other or as contradictory. Chandra’s response is below and Jha’s response is here.

The two researchers touch on differences between the methods and conclusions of the two studies. However, both researchers appear to essentially agree that, in Jha’s words, “unlike most sectors of the U.S. economy, where we usually have to make a cost-quality trade-off, no such sacrifice is likely to be necessary in the health care sector. There is ‘plenty of fat’ that can be removed to identify the high-quality, low-cost institutions.”

In a study comparing hospital-level spending and quality, we found no evidence that hospitals with higher spending provide better care. In fact, in some cases hospitals that spend more provide worse care.

Background

In a climate of growing concerns about how much our country spends on health care, it is increasingly important to know what we’re getting for our money. Previous research has demonstrated a negative relationship between quality and spending at the regional level. However, findings at the level of the Hospital Referral Region (HRR) — a geographic designation devised for the Dartmouth Atlas of Health Care, reflecting hospitals’ typical service areas — do not lend themselves to actionable policy. Our study is one of the first to examine the relationship between hospital-level quality and spending. Read the rest of this entry »

The appointment of Dr. Thomas Frieden as the new director of the Centers for Disease Control and Prevention (CDC) is a triumph for public health and the American people. A passionate and well-informed professional, Frieden has been unusually successful as New York City’s Public Health Commissioner. In that role, with the strong backing of Mayor Mike Bloomberg, Frieden was able to greatly expand smoke-free areas in restaurants and other public areas, decrease smoking among adolescents, eliminate trans fat from foods sold by purveyors, and promote other initiatives that have led to improvements in the health of many New Yorkers.

Now, Frieden is moving to a larger stage, and, inevitably, the triumphs he achieved in New York will be cast in a broader political light. Besides the plaudits that led President Barack Obama to appoint him, there could also be cries that Frieden is overreaching and creating a “nanny state” from those who believe that government should not stick its nose into the private lives of individual citizens. Read the rest of this entry »

Everyone in the health care debate seems to agree that the biggest problem is costs and that the best way to control costs is to get at the waste in the system. To raise the money needed to cover everyone and to make the system sustainable, goes the argument, we need to convert the upwards of 30% in excess costs now in the system to savings.

I think that’s right.

Many of my friends in the health care debate say the way to do that is with a robust public-plan option. The reasoning goes that a Medicare-like public plan that can drive down reimbursement rates for providers will create strong competition for the traditional insurers and health maintenance organizations (HMOs) so they finally have to tackle the problem of costs and waste.

I agree with their premise that we need to have unambiguous incentives for the stakeholders to get the job done and finally drive the waste out of the system.

But I question whether a Medicare-like public plan option can do it by creating a new competitive landscape based upon provider underpayment: today most private health plans pay doctors about 20% more than Medicare and pay hospitals about 30% more.

The Problem With Paying Providers Less

Provider underpayment schemes never work. Just look at the Sustainable Growth Rate (SGR) formula. The SGR was created many years ago as a means to force Medicare doctors to become more efficient. The idea was, if Medicare physician costs grew at a rate faster than we could afford, the docs would retroactively give the money back the next year in the form of compensating fee reductions. The message was clear: become efficient or we’ll take the money back next year. Read the rest of this entry »