Dartmouth Analysis Again In the Cross Hairs

Reed Abelson and Gardiner Harris in the New York Times are questioning some of the key assumptions behind the Dartmouth Atlas of Health, which for twenty years has documented wide variations in Medicare utilization rates across the country and used that to claim huge savings could be obtained by rooting out waste in high-spending regions. In February, Harris reported on a commentary by Sloan-Kettering’s Peter Bach in the New England Journal of Medicine that argued the Dartmouth analysis failed to adjust for illness severity. I reported on the Medicare Payments Advisory Commission’s similar analysis here.

This time, the Times’ two most thoughtful health care reporters bring quality into the discussion. After describing a map in Office of Management and Budget director Peter Oszag’s office that divided the nation into low-spending beige regions and high-spending brown regions, they write:

For all anyone knows, patients could be dying in far greater numbers in hospitals in the beige regions than hospitals in the brown ones, and Dartmouth’s maps would not pick up that difference. As any shopper knows, cheaper does not always mean better. . . The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested. Cuts, if not made carefully, could cost lives.

For documentation, the reporters used quality data generated by the Wisconsin Collaborative on Healthcare Quality, which I wrote about a month ago for The Fiscal Times.

This is an important debate. But as is often the case in journalism, the attempt to reduce complex realities into a single-factor analysis that can be summarized in a headline or a single “why this story is important” paragraph can leave a mistaken impression. Regional variation in Medicare spending is one indicator of gross overutilization. Something is happening when a hospital in McAllen, Texas does twice as many knee implants per Medicare beneficiary as a hospital in Baton Rouge, Louisiana. (An earlier version of this post compared McAllen to Rochester, MN, which actually has a slightly higher rate of knee implants per 1,000 Medicare enrollees.)

But that by itself tells us nothing about why that overutilization occurs. Greedy doctors or hospitals working in a fee-for-service system are part of the problem. Cost shifting due to high levels of uninsurance and illness severity also may account for some or even much of those differences. And, as the Times report points out, quality differentials have to be taken into account.

The pushback by Dartmouth Atlas proponents has already begun. The Atlas website carries a five-page rebuttal of the Times story. Meanwhile, Columbia University professor Andrew Gelman on his blog suggests the reporters could have used some help from experts in statistics to help them focus their analysis. My complaint with today’s story comes from an entirely different angle. Higher quality care lowers costs, it doesn’t raise costs.

Take a few additional steps to keep operating rooms germ free and rates of hospital-acquired infections and their attendant higher costs plummet. Do a knee implant right the first time and you don’t have a patient back within a year for a revision. A careful mapping of quality has never been done by Medicare or anyone else since good data isn’t available. The Wisconsin Collaborative is one of the nation’s few efforts to create such a database. The reform law will generate much better data, but that is years away. But when it is done, comparing those maps to spending patterns may provide researchers with crucial clues for determining what accounts for variations in spending across the U.S.

One thing is for certain. Quality data will provide patients-as-consumers with information about what hospitals and physicians to avoid — something that spending patterns by themselves can never do.

(An earlier version of this blog post incorrectly called Professor Andrew Gelman of Columbia University a defender of the Dartmouth Atlas analysis. His blog’s critiquefocused on the methdology of the Times reporters. I regret the error.)

Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect and The Washington Post. His most recent book, “The $800 Million Dollar Pill – The Truth Behind the Cost of New Drugs ” (University of California Press, 2004) has won acclaim from critics for its treatment of the issues facing the health care system and the pharmaceutical industry in particular. You can read more pieces by Merrill at  GoozNews, where this post first appeared.