Regional Variation Revisited: Price Differences Not A Significant Factor
Dartmouth scholars have revisited their analysis of regional variation in health care spending and found contrary to the assertions of some critics that cost-of-living differentials do not account for much of the difference. However, they confirmed that some big cities with high poverty concentrations that also serve as training grounds for future physicians may have been unfairly lumped in with areas that overuse health care services.
The new study in Health Affairs showed after adjusting for price differences that Miami, Florida and McAllen, Texas still led the pack in terms of how much Medicare spent on each beneficiary. Both areas still spent nearly three times more than the lowest spending regions of the country, which remained Honolulu, Hawaii and LaCrosse, Wisconsin.
There were a few areas of the country where the adjustments made a big difference, and they were mostly big cities. The Bronx and Manhattan in New York City fell 39 and 33 percent, respectively, from the adjustments. But price was only a minor factor, according to the researchers, who were led by Daniel Gottlieb of the Dartmouth Institute for Health Policy and Clinical Practice.
Much of the reason why the New York metropolitan area is so costly is not because of the wage index per se (what we usually think of as “cost-of-living” adjustments), but because the CMS pays hospitals in the New York area so much to reimburse them for graduate medical education and caring for disproportionate shares of low-income patients.
Other high-spending areas frequently targeted by critics did not do so well under the adjustments. Los Angeles, for instance, dropped just 14 percent after adjusting for cost-of-living, graduate education and disproportionate share payments for low-income residents.
The Medicare Payment Advisory Commission issued a report late last year that suggested regional variation in use patterns were less than the Dartmouth Atlas of Health scholars had previously estimated. This latest study says regional variation still matter — a lot. The debate clearly isn’t over.
Here’s the list of the ten highest and ten lowest spending areas in the country both before and after adjustments for price, graduate medical education and disproportionate share payments:
10 high-spending hospital regions:
BEFORE AFTER % CHG.
FL-Miami $15,909 $14,966 6%
TX-McAllen 13,633 13,881 -2
NY-Bronx 12,004 8,653 39
NY-Manhattan 11,744 8,861 33
TX-Harlingen 11,489 11,324 1
CA-Los Angeles 10,674 9,325 14
NY-Long Island 10,608 8,740 21
MI-Dearborn 10,460 9,791 7
LA-Monroe 10,226 11,385 -10
MI-Detroit 9,954 9,541 4
10 low-spending hospital regions:
ND-Minot 6,033 6,711 -10
VA-Lynchburg 6,022 6,524 -8
CO-Grand Junction 5,983 6,075 -2
OR-Eugene 5,968 5,798 3
IA-Iowa City 5,902 6,254 -6
SD-Rapid City 5,854 6,176 -5
OR-Salem 5,810 5,642 3
IA-Dubuque 5,799 6,219 -7
WI-La Crosse 5,715 5,757 -1
HI-Honolulu 5,293 5,212 2
5 hospital regions with biggest drop due to price and other factors:
NY-Bronx 12,004 8,653 39
NY-Manhattan 11,744 8,861 33
CA-Alameda County 9,251 7,094 30
CA-San Francisco 8,140 6,278 30
CA-San Mateo County 7,878 6,104 29
Cost, Choice, and Value
The Massachusetts Massacre has everyone stepping back a bit. The President says that we should “coalesce around those elements of the package that people agree on,” but it is unclear just which elements those might be, given the extreme polarization that has defined the debate. He suggests that points of agreement might center on insurance reform and cost containment, which are both important goals. I’m skeptical that a sudden flowering of bipartisanship will allow such agreement, however. Ezra Klein, on the other hand, has a paring proposal that goes in another direction, and reminds us of why we got into this in the first place: to extend coverage to the uninsured. If we must narrow our focus, Klein says we should extend Medicare to those over 50, and expand Medicaid to those under 200% of poverty. This would get lots of people insured, and could well be accomplished through budget reconciliation if no Congressional coalescing is to be had.
However the parsing, paring, and palavering goes, cost control is and will be at or near the health reform debate for years to come. Two recent articles are worth a look for those interested in analysis of cost-containment strategies.
The Cost of Fear
I was talking to a fellow physician about a mutual patient. I had
information that would help him in their care and he was taking the
unusual step of asking me for my information. I was impressed.
“Could you fax me those documents?” he asked. ”Here’s my fax number.”
I scrambled to get a pen to write down his number. Then I had a
thought: “I could email you those documents much easier. Do you have
an email address?”
Silence.
After a long pause, he hesitantly responded, “I would rather you just fax it.” He said no more.
This is a typical reaction I get from my colleagues when suggest
using the new-fangled communication tool called email. The palms
sweat, the speech stumbles, and the awkwardness is thick in the air.
It’s as if I am suggesting they join me in an evil conspiracy, or as
if I am asking them to join my technology nerd cult. There is a
culture of fear in our healthcare system; it’s a wall against change, a
current of stubbornness, a root of suspicion that looks at anything
from the outside as a danger. Instead of embracing technology, doctors
see it as a tool in the hands of others intent on controlling them.
They see it as a collar on their neck that they only wear because
others are stronger than them.
It’s the only reason I can see for the resistance of a transforming
technology. It’s the only way to explain how they would favor a
non-system that hurts their patients over a system that can improve
their care immensely. After all, what good is it to embrace a
technology – no matter how good – if it will take away their ability to
practice medicine? ”It’s good for you!” they hear from politicians and
academics, but they see it as a poison pill.
The Info-Button Standard: Bringing Meaningful Use to the Patient
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Regardless of the U.S. administration’s “meaningful use” requirements, if health information technology (HIT) is to become meaningful for patients, it must include the prescription of information and tools to help each patient better manage his or her own care.
Ask patients what they want from HIT systems, and they will tell you three things:
– “Tell me my diagnosis, what will happen, and what I can do myself to better manage the problem.”
– “Tell me my medical tests results and what they mean to me.”
– “Tell me my treatment options, and help me participate in the treatment decisions.”
The soon-to-be-finalized HL7 International Context-Aware Information Retrieval standard (nicknamed the HL7 “Infobutton” standard) makes it far easier for providers of electronic health records (EHRs) and personal health records (PHRs) to deliver just what the patient wants. And that is what will put the meaning into meaningful.
Using the HL7 Infobutton Standard for Information Prescriptions
The HL7 Infobutton standard has been widely adopted since 2007. It facilitates the delivery of a set of standardized information about the patient, the provider, and the activity of a specific care encounter or moment in care. An Infobutton manager (or equivalent) accessed by an EHR application can then pull from that set the information it needs for any relevant use case. In most cases the Infobutton has been used to bring up decision support information for the clinician.
Panicky People Make Bad Decisions : Salvaging Health Reform after Scott Brown
The shocking surrender of Ted Kennedy’s Senate seat to an insurgent Republican state legislator, Scott Brown, has imperiled President Obama’s health reform initiative. The Massachusetts “massacre” has unleashed a tidal wave of second guessing from Democratic pundits. Obama, the left argues angrily, got what he deserved for trying to find a bipartisan solution to health reform, for abandoning the beloved “public option” and snuggling up to the corporations they wanted to punish. If only he’d remained pure to their ideals, Martha Coakley would be a Senator and he’d have a bill on his desk by the end of the week. General Custer could not have gotten worse advice.
It’s possible that the loss of Ted Kennedy’s Senate seat might end up saving both health reform and the Obama Presidency. The President seems to understand what happened in Massachusetts better than his more ideological brethren. Disarmingly, he argued the day after Brown’s victory that it was produced by the same popular anger as his own election, though it’s worth noting an important qualitative difference. The 2008 election coincided with a full blown market panic, which the President’s calm and policies helped quell; What he is now facing is much closer to voter despair, as the domestic economy digests a huge overhang of debt, and unemployment lingers above the toxic 10% level.
The Health 2.0 Show, January 2010
Earlier this week we recorded the very first episode of the Health 2.0 Show. We're calling this new webinar series "The Health 2.0 Show with Indu and Matthew." The first episode features a quick talk about the new report from Health 2.0 Advisors, called The Past and Future of Health 2.0, and a great interview with Thomas Goetz of Wired Magazine. Thomas’ new book, The Decision Tree, comes out next month.
Here’s a link to the blog about the topic. And here’s the webinar. Some technical notes: The sound starts at 0.45 seconds. (Oops!) Matthew’s presentation starts at 7.56. Thomas’ talk and interview starts at 23.06.
Aneesh Chopra, talks Health 2.0
Aneesh Chopra is the Obama Administration’s Chief Technology Officer. He’ll be giving keynote speech at the Health 2.0 Conference in San Francisco, Oct 6-7.
After Reform
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One in six Americans at some point during this year will go without health insurance. Most of them at any given point in time do not need it.
One in ten working Americans are without gainful employment right now. Every one of them wants a job . . . right now.
That as much as anything explains Tuesday’s Senate special election result in Massachusetts, the only state in the union that has a health insurance plan similar to ones passed in the House and Senate last year. Were voters there rejecting their own system? Not according to every poll that asks the question. The Bay State has the lowest uninsured rate in the nation; local residents have learned to participate in the insurance exchange set up under its plan (passed under a Republican governor); and people seem to like it.
So any commentary that seeks to make health care reform the scapegoat for voters choosing Scott Brown, an obscure state senator, over an aloof attorney general Martha Coakley, is off the mark.
Massachusetts hasn’t solved its health care problem. Its costs are still rising at an unsustainable pace, suggesting the reforms in the national legislation won’t solve that problem either.
Martha’s Mistakes
Not one to comment on broader political issues but just can’t help myself today after awakening to the news that Kennedy’s Senate seat has gone to the Republican upstart Scott Brown. Whatever happened to carrying on Kennedy’s legacy for healthcare reform, something Martha Coakley vowed to support and Brown vowed to defeat? Has Massachusetts really gone Red (or just a lighter shade of Blue)?
Reflecting on my own thoughts and vote for Martha, have come up with the following missteps of Martha’s that ultimately led to her losing what was considered a sure thing, Kennedy’s seat in Congress.
1) Assuming the cat is in the bag. Skating to an overwhelming victory in the Democratic primary, Martha naturally assumed that Kennedy’s seat was her’s for the taking. Sure, the Republicans would put someone on their ticket, a sacrificial lamb, but a serious contender, no. Surprise, surprise. Yes, the Republicans put forward a relatively unknown State Senator from a small community, but this unknown Scott Brown proved to be an extremely engaging and aggressive politician. By the time Martha’s political machine realized that they had a serious challenger on their hands, it was too late, his momentum too great.
