With healthcare spending expected to reach $4 trillion annually by 2017, chronic disease accounting for 75% of healthcare costs, and CMS testing ways to improve outcomes and lower costs, the Dartmouth Institute for Health Policy and Clinical Practice is suggesting more care does not equal better quality.
The most recent edition of the Dartmouth Atlas Project of Health Care (DAP), Tracking the Care of Patients with Severe Chronic Illness, states Medicare could save tens of billions of dollars annually if it followed the practice patterns of a facility such as the Mayo Clinic in Minnesota.
The report suggests that physicians are prescribing too many services and notes the differences between how particular regions handle end-of-life care for chronic illness patients. The authors say the cost differences coupled with the lack of better outcomes and quality shows policymakers must review the healthcare system. “The opportunity lies in the potential gains in efficiency that could be achieved if higher spending regions or hospitals adopted the practice patterns of the most efficient U.S. regions,” according to the report.
The Dartmouth project began in 1993 to study healthcare and measure variations in resources and utilization by geographic areas. The research has more recently expanded to report on resources and utilization among patients at specific hospitals. “The extent of variation in Medicare spending, and the evidence that more care does not result in better outcomes, should lead us to ask if some chronically ill Americans are getting more care than they or their families actually want or need,” said Risa Lavizzo-Mourney, MD, MBA, president and CEO of the Robert Wood Johnson Foundation, a healthcare advocacy organization, in a statement.
Medicare, according to the DAP, encourages the overuse of acute care hospital services and the proliferation of medical specialists because of misplaced financial incentives, especially for treating chronically ill patients.
In the report, the Dartmouth authors studied chronically ill patients, including patients with cancer, CHF, and chronic lung disease.
One way to improve care, according to the DAP, is through the medical home model, which places the primary care provider at the center of a patient’s care coordination.
The model has gained popularity; for example, it is the template for CMS’ Physician Group Practice (PGP) demonstration project. CMS has praised the results, citing two groups earning performance payments for quality and efficiency of $7.3 million as part of their share of the $9.5 million savings in the Medicare program. Two other groups also met all 10 diabetes clinical quality measures in the PGP project.
“Medicare policy, including reimbursement, should support ‘organized’ systems of effective care management, with a strong primary care component,” lead author John Wennberg, MD, said in a statement. “The federal government should also support better research into clinical practices for managing chronically ill patients.”
The study’s authors found that the patients studied cost healthcare $289 billion from 2001–2005, but if the spending per patient mirrored Mayo’s home region of Rochester, MN, Medicare could have saved $50.1 billion, or 17.3%. The report also compared Mayo with UCLA Medical Center to show how increased services raise costs but do not improve outcomes. For example:
UCLA spent more than $93,000 per patient in the last two years of life, whereas the Mayo Clinic spent $54,432
In the last six months of life, chronically ill patients at UCLA had more than twice as many physician visits as those at Mayo and spent almost 50% more days in the hospital
UCLA uses 1.5 times the number of beds and almost twice as many physician FTEs than Mayo Clinic in managing similar patients
According to the DAP, higher end-of-life costs did not equal better outcomes. In fact, mortality was slightly higher in the higher-cost regions following acute myocardial infarction, hip fracture, and colorectal cancer diagnosis, and healthcare providers adhered to process-based quality measures at a lower rate.
Patients in high-cost areas also reported worse access to care and greater waiting times, and the report found no difference in patient-reported satisfaction with care.
The DAP says two factors are driving decisions about care:
Doctors and patients believe that more services equal healthier patients.
Based on that belief, it is the supply of beds and treatments and specialists—not the person’s health status—that determines how many services are used. The supply of services creates its own demand, so regions with more resources have more usage and higher costs.
The Dartmouth conclusion also questions whether the country faces a physician shortage and says that not overusing acute care hospitals would save money and could help resolve the shortage of RNs.
“In light of the evidence that regions and academic medical centers with greater use of physician labor in managing chronic illness incur higher costs and have slightly worse outcomes, the assertion that the nation faces a physician shortage warrants critical examination,” according to the report.