the outcomes are no better. In other words, more intensive care is driven not by medical need but by what looks very much like excess capacity. Supply is fueling demand. And Medicare is not alone; studies show that Blue Cross Blue Shield has identified the same disparities.

Build the beds, in other words, and someone will fill them. And not just in big cities like Miami or Los Angeles. If you live in Lubbock, Tex., or Hattiesburg, Miss.—places where there are twice as many hospital beds per 1,000 residents as in the average low-spending region—you are more likely to find yourself in one of those beds.

And once you are there, "lying down and spending more time in the hospital," you are bound to see more specialists and subspecialists, Fisher told the MedPAC commissioners. And you will "get more tests and minor procedures—because that's what we do to you when you're there."

The Dartmouth team does not believe that specialists in high-treatment areas count the beds in their region and then, with an eye to boosting their income, grimly set out to fill them. As Wennberg explains it, the number of beds plays a subconscious role in physicians' decision-making. "While physicians don't really know how many beds are available," supply has a "subliminal influence on utilization," says Wennberg. "If there's a bed available, naturally you'll use it."

This is because when it comes to deciding whether or not to hospitalize a chronically ill patient, there is no rule book. When should a 65-yearold cancer patient suffering from congestive heart failure be admitted to the hospital? When would she be better off at home? The differences in spending come largely "in the gray areas of medicine," Fisher told MedPAC, areas "where there is uncertainty about the right thing to do."

Convenience often influences the decision, too. From a physician's point of view, it is easier to manage care in an inpatient setting, since there are no late-

In another study, the Dartmouth researchers zeroed in on how hospitals in California care for the chronically ill during their final two years of life. They found that Medicare paid some hospitals four times more than others—with no gain in the quality of care or patient satisfaction.

night calls. But hospitalization lowers the threshold for further intervention: it is now easier to order tests, perform minor discretionary surgeries, or consult with other specialists, who in turn order their own tests and treatments. So one thing leads to another. And in the background, the fee-forservice system rewards everyone for doing more.

When it comes to how often a patient sees a specialist, the uncertainties of medical science once again come into play. How frequently should a doctor see a patient suffering from congestive heart failure? Every two months? Every four months? Again, there are no clear guidelines.

"The doctor will sort it out based on how sick the individual patient is and how many openings he has in his schedule," Wennberg explains. "Specialists tend to fill their appointment books to capacity," so it is easy to see how doubling the supply of cardiologists in a particular town means that patients there will see their doctors twice as often.

The result of overtreatment
Uncertainty, convenience, and the automatic tendency to use whatever resources are available—whether time, beds, or technology—all of these explain how supply drives a doctor's decision-making. The process proceeds quite naturally. Yet none of these factors seem to have much to do with either medical science or the needs of the patient. Each step of the way, an individual doctor may or may not be overtreating a particular patient. But, as Fisher pointed out to MedPAC, a big-picture view of aggregate outcomes in high-spending regions shows "higher mortality rates . . . and no improvement in function."