The State of the Nation's Health
2006 paper on chronic care. "Rather, they are relatively more efficient, achieving equal and possibly better outcomes with fewer resources."
Few think of the Mayo Clinic as discount health care. But, the report notes, if UCLA managed resources the way Mayo does, it would need 50% fewer physicians.
In other words, "affordable, high-quality" care is not an oxymoron. Moreover, if we could learn to provide better care with fewer resources nationwide, we could then afford to provide high-quality care for everyone. "Long-term, we cannot create a sustainable health-care system that provides 'the right care at the right time' to everyone—unless we learn to contain costs," Schroeder warns. "As long as we focus on access, quality, and cost separately, we are going to continue to spin our wheels."
The beauty of the Dartmouth research is that it addresses all three issues—quality, cost, and covering the uninsured—simultaneously. By looking at outcomes as well as costs, it deconstructs the myth that "more" leads to higher quality. And, in the process, it points to how we might find the funds needed to cover the uninsured. There is enough money sloshing around in the system already to provide excellent care for all—if providers in Miami could just learn to practice medicine the way they do in Minneapolis.
Otherwise, the inequities will multiply as providers in high-spending regions continue to expand the volume of services they provide: "If the people of Iowa were ever to realize how their Medicare dollars are used [to pay for unnecessary care in high-spending
The Dartmouth research points to how we might find the funds needed to cover the uninsured. There is enough money sloshing around in the system already to provide excellent care for all—if providers in Miami, Fla., could just learn to practice medicine the way they do in Minneapolis, Minn.
regions]—while their own Medicare premiums go up—there would be a revolt," says Robert Reischauer, president of the Urban Institute and cochair of MedPAC. "Without compromising quality, we could save a lot of money," he adds.
MedPAC calls for change
Although politicians don't like to talk about geographic variations in health-care spending, Med-PAC, to its credit, addresses the issue head-on in its March 1 report to Congress.
Citing the Dartmouth research more than 50 times in the 236-page document, MedPAC notes that "fee-for-service
reinforces a general style of medical practice beyond the financial means of an increasing number of Americans. We fear that fee-for-service, left unchanged from its current design, . . . may contribute to more Americans joining the ranks of the uninsured."
Acknowledging that the sustainable growth rate (SGR) plan has not contained health-care inflation, the report lays out two alternatives:
Congress could repeal the SGR. Instead of paying the nation's doctors according to whether or not they exceed a national target, Medicare might adopt a pay-for-performance system that rewards providers for quality and efficient use of resources.
Alternatively, if Congress wants to continue to use annual targets for growth, the report suggests that those targets apply to all providers—hospitals and nursing homes, as well as physicians. Moreover, "the target, and any resulting payment adjustments, [should] be applied on a geographic basis," with "the greatest pressure . . . applied to those areas of the country where per-beneficiary costs are highest and the contribution to growth in expenditures is greatest" (emphasis added).
"This will be very controversial," acknowledges MedPAC Chair Glenn Hackbarth. "People will argue that a geographically-based reimbursement system is unduly harsh on Miami. But we don't have an equal cost problem in all parts of the country."
Nevertheless, it's unlikely that Congress will ax reimbursements to Miami and