More health care isn’t always better, just more expensive.
Post-Dispatch file photo.
What’s the difference between a senior citizen in St. Louis and another in Kansas City? About $700, as far as Medicare is concerned.
In 2006, Medicare spent an average of $702 more per patient in St. Louis than it did in Kansas City. Why should this be?
Doctors in Kansas City are just as good and have access to the same technology as those in St. Louis. People in the two metro regions aren’t much different, either. They fall prey to the same illnesses and infirmities. But caring for them costs an average of about 9 percent more in St. Louis.
Even at that price, St. Louis (average spending: $8,306 per Medicare enrollee) is a bargain compared to McAllen, Texas ($14,946) or Miami ($16,351). Spending in Miami is a staggering 144 percent more than Minneapolis ($6,705). What gives?
Americans have the most expensive health care system in the world. That’s not so much about the quality as it as about quantity.
For the most part, people in other developed nations have access to the same treatments and drugs that Americans do. But when we get sick, we’re more likely to receive very intensive treatment, often involving expensive high-tech equipment and newer drugs or medical devices.
We expect it. Our approach to health care is like Oliver Twist’s approach to dinner: “Please, sir, I want more.”
But more health care isn’t necessarily better. In 2001, “over use” — too much medical care — was identified by the Institute of Medicine as one of three categories of medical error.
Some variations in Medicare spending reflect differences in the cost of living. New York is much more expensive than St. Louis; it’s not surprising that Medicare spending is higher there.
But San Francisco has a much higher cost of living than Miami. Yet Medicare spends about half as much in San Francisco as it does in Miami.
Researchers at Dartmouth College, who compiled those figures, have worked for decades to decipher the differences. People in some cities may be sicker than those in others, they believe. But even after adjusting for that, significant spending differences remain.
The most likely explanation: Roemer’s Law.
During the 1960s, researcher Milton Roemer noticed that the more hospital rooms that were built in Los Angeles, the more patients were admitted to fill them.
Health care often turns the law of supply and demand on its head. The more supply there is, the more demand it creates.
Dartmouth researchers found that they could predict how long a Medicare patient would be hospitalized just by knowing hospital capacity in the city where they lived. The more hospital beds, the longer patients are hospitalized and the more Medicare spends. That’s Roemer’s Law.
People who have a heart attack in St. Louis or Kansas City — or Miami or Minneapolis — get pretty much the same care. But in many other areas of medicine, treatment protocols are less clear. That’s where judgment comes into play.
Should a procedure that’s been shown to help patients who already had a heart attack be used on those who haven’t, but might? Which patients should be referred to specialists or admitted to a hospital?
Those are medical questions. But because of how we pay for health care, they’re also economic questions. Doctors and hospitals don’t get paid for managing care; they get paid for providing it. The more they do, the more they bill and the more they’re paid.
Roemer’s law also applies to expensive equipment such as MRI and CT scanners. The more there are, the more scans are done and the more it costs. Spending for those tests doubled over 10 years.
Medicare patients in expensive cities are hospitalized more often, see specialists more often and have more expensive tests.
What they don’t do is live longer or better. Many, in fact, have shorter lives.
Dartmouth researchers have shown that in high-spending regions, patients with heart attacks, hip fractures and colorectal cancer had worse survival rates than those in lower-spending regions. They also were less likely to get care that met established treatment guidelines. Even more surprisingly, both doctors and patients in high-spending regions say they face longer waits to see medical specialists or be admitted to a hospital.
Between one-fifth and one-third of all U.S. medical spending — as much as $800 billion — goes for care that does nothing to improve our health.
If all that extra spending doesn’t buy better care, why bother? Getting control of waste, and potentially harmful over treatment, is complicated. Among the solutions:
• Pay doctors for managing care, not just providing more of it.
• Increase research into which treatments and drugs work best.
• Encourage doctors and hospitals to adopt practices from the best-performing, most cost-efficient regions. That doesn’t mean scrimping on care; it means doing a better job of providing it.
The stakes are considerable. Dartmouth researchers estimate those reforms could save $1.4 trillion over the next 15 years. If you’re looking to pay for national health care reform, that’s a pretty good start.
“It may sound noble to say, ‘Damn economics, let us build up a decent world’” — through socialist programs, in short — “but it is, in fact, merely irresponsible.” ~ Friedrich Hayek
The reason McAllen Texas has such high costs per capita is because American retirees in Mexico all flood to McAllen for their medicare/medicaid treatment rather than get treated in Mexico. If the costs per patient were used, McAllen would be look more normal.
This editorial really exposes the truth behind the push for reform; limiting your health care options. No longer can you and your doctor come up with a treatment plan for you, now your treatment plan will be decided by bureaucrats in Washington.
Wow, looks like somebody at the Post finally read the New Yorker article I’ve posted on here like four times. Good work, guys.
Of course, due to your relentless desire to nationalize healthcare, you omit an important statement in the article upon which this editorial is based:
“When it comes to making care better and cheaper, changing who pays the doctor will make no more difference than changing who pays the electrician. The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care. Otherwise, you get a system that has no brakes. You get McAllen.”
I used to do business in McAllen. On my first visit, I asked a doctor what the largest industries were and he replied, “drugs and trip and fall lawsuits”. He also told me recent immigrants were used to the government paying for whatever healthcare they got in Mexico and if they thought it was provided by the government it was free and if it was free they would turn out in droves. It would be interesting to cross reference these data points with the judicial hellhole data base. Unless tort reform is part of healthcare reform, we are just kidding ourselves. But, since Obama is in the back pocket of trial lawyers, that probably won’t happen.
I would like to point out that in the P-D EB’s zeal to shove their healthcare reform down our throats, they failed to point out that the picture used along with co-shover Dr. Kimmey’s commentary was the picture of a staged DNC’s Organizing for America Campaign staffer Obama “used” during his healthcare townhall meeting. What a hoax these people are and it’s sad to see intelligent people buying into all the politics of fear hoaxes perpetrated by the Obamanation.
Do we need fixes? Absolutely! Do we need to destroy our country in doing so? Apparently! Look out China and India, here come more of our jobs!
Once again everyone, thank you for the thoughtful comments — especially on a holiday weekend. A few thoughts in response:
Nick,
I’ve been writing about the Dartmouth Atlas of Health Care — the data set that New Yorker article is based on — since at least 2001. It’s a fascinating body of work. I’ve mentioned Dr. Jack Wennberg, who founded the Dartmouth Institute for Health Policy and Clinical Practice, numerous times over the years. And I’m one of several here who regularly reads the New Yorker. But thanks for the suggestion. I didn’t acknowledge them when you first made them.
jjk,
The issue in McAllen isn’t lawyers. One of the local doctors interviewed by Atule Gawande (who is a Boston surgeon when he’s not writing for the New Yorker or writing books) pinpoints what he calls an “entrepreneurial spirit” and a “culture of money” among his fellow physicians.
A relevant quote: “he had too often seen financial considerations drive the decisions doctors made for their patients — the tests they ordered, the doctors and hospitals they recommended — and it bothered him.”
Si Vis
The figures in the editorial ARE costs per patient. It might be helpful to skim the data sets and the linked article before you try to diagnose the problem in McAllen.
If the issue were something as simple as American retirees, the costs per patient in McAllen would look more like those next door in San Antonio ($8,793) or further west in Odessa ($8,515) and El Paso ($7,504). All are right on the Mexican border, where retirees could easily cross to get health care.
Sam,
I’m puzzled by your comment. The system described in the editorial is the current system, not some socialist utopia. You might take a look at the quote I cited to jjk for some insight by a McAllen doctor into why they’re so high.
The moment the government gets control of health care it will start rationing. The purpose of this article is to get the American people used to the idea. The solution is to cut taxes so the American people have enough money to control their own destiny. That way, if your insurance plan doesn’t cover everything, you’ll have enough savings to pay for it yourself. Even better, you won’t have to plead your case with some government bureaucrat that doesn’t care whether you live or die.
“If you’re looking to pay for national health care reform…”
That’s an odd sentence, no ?
One wouldn’t “pay” for reform… one would merely “reform.”
Did you mean to say “These reforms will help pay for national health care.”
Remember — There’s no problem that government can’t make worse.
So we go from under-insured to over-insured. Or, excuse me, over-treated. Way to go, Post-Dispatch, to try to soften people up and make them feel guilty about cancer (kidney, liver or whatever) treatments. Yeah, right. Now when the new “Obama” plan takes effect, I will be happy to take my place at the end of the line. Taking into consideration my age, previous health, and whatnot.
Using your own criteria, the architect of this plan, Senator Ted Kennedy (”the lion of the Senate”), would have been “put down” by now or at least denied care. I use this terminology because that is what you understand. I find it offensive. I believe that Senator Kennedy should seek any care he can afford.
The ironic thing is that future senators in Mr. Kennedy’s conditon will get the same care he is getting, because they have money and influence. The rest of us will be getting pushed to the back of the line.
some problems with the nation’s healthcare might be remedied by compliance on the part of the patient. the patients and their families need to follow the doctor’s orders, change dietary habits, exercise(if able), and everyone needs to start from childhood to be more active, be respectful of your body, follow the rules. and, sometimes there is nothing more that can be done to prolong life. people should think about the quality of life, not the length. have respect for yourself and your surroundings.
If the trial lawyers and the politicians would go away, maybe then defensive medicine would go away. Once the individual takes responsibility for themselves and tells the idiots in DC to take the lawyers and go jump in the lake, maybe then true health care reform could occur. Putting the federal and state governments in charge is synonymous to avarice, greed and mismanagement through not listening to the voters but the special interests. Much like the Post Dispatch…..er…Post Disgrace. Not holding any individual responsible for their actions is just plain stupid. We have over 20 million illegal aliens, we are supposed to support them with free health care? We have over 10 million Y generation types who care more about their cell phone plans than insurance. Give me a break. 50 million without healthcare, nuts. Show me the statistics.
A blogger on the Wall Street Journal told a chiling story, last month, about health care rationing in East Germany. When a pensioner asked the government bureaucrat why he was being denied care, the response was “You’re a pensioner”. We are heading down a very dangerous path when we let the government take over both our health care and our retirement. The more of our money we allow the government to take from us, the less free we will be to control our own destinies.
Most of the uninsured are uninsured temporarily because they are in between jobs. Here’s a link on the stats.
http://www.heritage.org/Research/Welfare/wm556.cfm
John,
I keep hoping for a citation from the Naional Review. I got my info from a full-time doctor in McAllen, not a surgeon in Boston and writer from New York.
Isn’t it interesting that more than 40 years of government control in Medicare has resulted in such disparities? Saving $1.4 Trillion is a pipe dream. Look at the projections made by the government of what Medicare costs would be at specific points in time. The estimates were always far below actual costs.
The answer lies in putting consumers (patients) back in the mix. When the person receiving the services is the same person paying for the services, real reform and cost containment will result.
Nowhere in the “proposed solutions” is tort reform. The so-called “necessary tests” aren’t what medical professionals choose to do.
As long as the loser suffers no consequences for filing suit, the system can’t be fixed. Simple as that.
The PD editorial board is just doing its job, carrying water for the Obama administration………that why it is now dubbed “state-run media” Obama is going to Russia next week to get some more ideas on how to manage information…….likely will pick up an award or two on his recent “Town Hall” on health care. Is this what you voted for?
If this were an issue the Republican Party wanted then the PD Ed Board would have 2 articles a day on why Universal Healthcare would be terrible.
“Getting control of waste, and potentially harmful over treatment, is complicated. Among the solutions:…
• Pay doctors for managing care, not just providing more of it.
You mean like HMOs have done for decades? Funny the statists should suddenly embrace the health care model they’ve spent years bashing. Not that this isn’t a good idea, but how about we get medicare and the other federal health programs to do it before we destroy a system that works perfectly well for 80% of us?
• Increase research into which treatments and drugs work best.
You know those large buildings right across the street from Forest Park? They’ve been doing this since forever.
You don’t need a massive new federal bureacracy to duplicate clinical trials. Besides, the feds already have control over a lot of this. That’s what the FDA, CMS, and NIH are for.
• Encourage doctors and hospitals to adopt practices from the best-performing, most cost-efficient regions. That doesn’t mean scrimping on care; it means doing a better job of providing it.
No better place to start than right here in our own backyard:
http://www.ssmhc.com/internet/home/ssmcorp.nsf/31060168df94973f86256a0e0058c993/0013a0529f4465fc862573cd005cf099?OpenDocument
Instead of searching thither and yon for specious reports and obscure statistics, why doesn’t the PD ask the experts who live right here? Oh right, they won’t back your narrative.
“The stakes are considerable. Dartmouth researchers estimate those reforms could save $1.4 trillion over the next 15 years. If you’re looking to pay for national health care reform, that’s a pretty good start.”
This sort of thing has been going on all across the country for years. Health care costs peaked in the last decade and have been coming down ever since. That last thing we need is a massive new beauracracy that duplicates efforts and sticks it’s grubby little mitts where they don’t belong. If you think Obamacare is going to “save” a single dime, you’re delusional..
I carry a private policy that will only cover my chemotherapy treatments if I’m admitted to a hospital. They won’t pay if I go to an outpatient infusion center. This doubles the cost of each treatment, at least! When I tried to reason with them to let me go to the outpatient center, they began to tell me that maybe I didn’t even need chemo. I saw where that was going and kept my mouth shut from then on.
Control the waste. I like that. I recently had to get and xray and without insurance it would have been #3000 in bills.. This to me is outragous.. but they charged it cause they know the insurnace company will pay it. Lets get more realistic with the bills.. What did that x-ray really cost? Its ok to make a profit but lets get real…….. While in the waiting room I met a rather overweigh lady who demanded a wheelchair be provided…who rolled out 5 times to smoke and 3 times to get a snack from the machine and then complained about her diabetes and her leg pain, she couldnt work and couldn breath well etc……. She said medicare had covered over $300,000 worth of care for her IN JUST ONE YEAR and she wasnt doing anything but keeping herself sick by not taking care of herself and accumulation HUGE medical bills that the taxpayers were covering without question…Cut off the people who refuse to follow doctors orders… Serious money could be save by doing that.