WHY does health care for the average Medicare patient cost nearly twice as much a year in New Jersey, at $8,076, as it does in Hawaii, at $4,529?
The differences are one example of perplexing geographic variations in medical expenses and quality. And in a study that has important implications for the nation’s $2 trillion health care tab, researchers have found that more intensive and expensive care does not necessarily mean better outcomes. In fact, the opposite may be true.
The Dartmouth Atlas of Health Care, a research group that studies variations and costs in medical care, sums it up like this: Geography is destiny. It means that your chances of undergoing certain surgical procedures, visiting the doctor often or even dying in a hospital or at home are related to where you live.
For example, Medicare patients living in Rhode Island undergo knee replacements at a rate of 5 in 1,000 people. In Nebraska, the number rises to 10 in 1,000. Female Medicare enrollees who receive a diagnosis of breast cancer have nearly seven times the chance of having a mastectomy in South Dakota, where the rate is 2 in 1,000, as they do in Vermont, where the rate is .3 in 1,000.
In another comparison, the Dartmouth group, a project of the college’s medical school, analyzed the costs and type of care patients receive in their last six months of life. Those in Oregon spend an average of eight days in the hospital while those in New York spend 35 days. In Oregon, the patient is seen by an average of 14 doctors during that period. In New York, 35 doctors see the patient.
In the last two years of life, the average Oregon patient costs $25,500, and the New York patient, $38,300.
Such differences cannot be explained by rates of illness or cost-of-living deviations. In some cases, drastic variations in Medicare treatment and costs occur even within states. There are almost twice as many hip replacements in Palo Alto as there are in San Francisco, for example. Such variations happen among the country’s top academic medical centers.
Some differences involve choices. Does a patient prefer to live with the pain and inconvenience of a bad knee, or undergo a knee replacement? It depends on personal preference and the advice that doctors give about risks versus rewards. Does a woman with breast cancer elect mastectomy or lumpectomy?
But much of the deviation appears to be caused by what experts call “supply sensitive care,” meaning the number of doctor visits and hospitalizations expand to the system’s capacity. Higher-spending areas have more hospital beds per person and more highly specialized physicians.
In communities with surplus hospital beds, research shows, patients do not necessarily get more elective surgery, but they have more hospital stays, more frequent doctor’s visits and are more likely to be referred to specialists.
Dr. Elliott S. Fisher, who studies health care economics and is a member of the Dartmouth research group, said that part of the problem was the way doctors and hospitals were paid.
“In a payment system that rewards everybody for staying busy, every bit of capacity you have, whether it’s the number of specialists or the number of intensive care beds or the M.R.I. scanner, has to stay fully occupied because they bought them already and they have to keep paying for them,” Dr. Fisher said in a telephone interview.
He told a Medicare Payment Advisory Commission panel last year: “If you’re lying down and spending time in the hospital and seeing more specialists, you also get more tests and minor procedures because that’s what we do when you’re in there.”
Paradoxically, the Dartmouth research, which confirms some similar studies, shows that patients in high-cost areas are not necessarily getting better care. Dr. Fisher said that he and his colleagues found higher mortality rates in higher-spending regions.
“When physicians describe the quality of care, they say the quality of care is worse in the higher-spending regions,” Dr. Fisher told the panel.
Among disturbing findings, Dr. Fisher said, are that tremendous gains in heart attack survival rates during the last 20 years have been smallest in high-spending regions.
One reason is that the risks of being hospitalized, including infections and medical errors, can outweigh the benefits. But the adage about “too many cooks” could also play a role.
“What we hypothesize is happening is that as the complexity of the system increases, it becomes less and less clear who is the responsible physician,” Dr. Fisher said.
