Two recent articles contend that, compared to other nations, the United States gets too little value for the money spent on health care. One is by Dr. John Wennberg and colleagues from the Dartmouth Institute for Health Policy and Clinical Practice. The other is a June 18. 2008, JAMA “Commentary” by Ezekiel Emanuel and Victor Fuchs, titled “The Perfect Storm of Overutilization.” JAMA, June 18, 2008; 299:23, pp 2789-2791.
Ezekiel and Fuchs first give examples demonstrating the extent of the problem. There is no measure in which the US excels, such as infant mortality, cancer deaths, heart disease, or life expectancy. We simply do worse. They then list what they believe to be 7 contributing factors, 4 for physicians and 3 for patients:
Physician Factors:
- Physician culture and education encourage doctors to look for every possible cause of a problem, leading to a “do everything” mentality.
- Fee for service payment misaligns incentives and promotes overutilization. When a third party is so often paying the bill, the doctor has little concern about cost to the patient.
- Marketing pressures increase utilization. Pharmaceutical companies spend $10,000 per physician to promote their products, and physicians are have insufficient time to research cheaper, and often equally effective, treatments.
- Fear of malpractice, whether real or perceived, increases testing, treatment and cost.
Patient Factors:
- Patients trust technology more than advice, knowledge and experience, and therefore want more treatments and tests.
- Direct-to-consumer marketing increases pressure to prescribe newer and more costly medications.
- Third party payments lead to demand not being modulated by the patient, who is insulated from the cost.
The authors then suggest policy changes that might improve the situation, emphasizing as the most promising a policy of value-based patient co-payments linked to effectiveness and cost of treatment options.
In the Dartmouth study Wennberg, and his colleagues point out that the average cost of health care for matched diagnoses in a variety of hospitals in the US ranged from $22,069 to $84,827. They then compare the cost data with quality and outcome studies and find no correlation between the money spent and the results achieved. The higher cost hospitals fared no better than lower cost hospitals. Some excellent hospitals were still among the least expensive. Only 1 of the top 5 most expensive was also among those top-ranked for quality.
Of the 93 hospitals studied, the medical universities of both Washington and Oregon were below the study average in cost. Notably, Washington was also among the hospitals ranked high in terms of quality.
Surprisingly, one area apparently overlooked in both of these studies is the regulatory cost of medical practice. The cost to physicians and hospitals for compliance with regulations such as EMTALA and HIPAA are not inconsequential.
Links:
1. A complete listing of the world comparison data in the JAMA “Commentary” can be found in a paper by Danzon and Furukawa published by the Congressional Research Service, and available << HERE >>
2. For the complete Dartmouth report, << CLICK HERE >>
3. For the press release on the Dartmouth report, << CLICK HERE >>
4. For the “Cliff Notes” version of the Dartmouth report, << CLICK HERE >>