Working With Us | Products | Case Studies | FAQ | About Online Media

Less Is Good But More Does Better

Aug
23
2006

One of the biggest elephants in the drawing room of the American health care system goes by the polite name “practice variation.” For decades practice variation was only popular with obscure health services researchers – yeah, I’ve got a Masters degree in that obscure ouvre – so I guess I cared. But no one else really did.

But now that concern about health care costs is becoming a more pressing political issue, things have changed. The esoteric concerns of a few are now the political issues of a growing group of people. So what the hell is “practice variation” and why does it matter as long as you’re getting better?

Simply put, practice variation is what happens when the same patient with exactly the same symptoms or disease receives radically different treatment based only upon where they live, or in many cases, on precisely which doctor they see. What you say, medicine is supposed to be a science so shouldn’t the same patient get the same care wherever they are? The answer ought to be, essentially “yes”. But the reality is that the services patients receive are markedly, markedly different. The brilliant academic who first discovered this phenomenon back in the early 1970s, John Wennberg, says that in health care, “geography is destiny” and doctors have hated him ever since.

The medical establishment’s first defense to Wennberg’s finding was to say that practice variation was the result of a few rogue doctors, out of the mainstream. But by using the nation-wide Medicare database the Dartmouth guys showed us that the mainstream was out of the mainstream! In some states the average treatment for similar patients was three times the cost in other states and I am sure that you can’t guess which ends of that scale Florida and Louisiana are on when compared to New Hampshire and Minnesota!

The next defense was that all that extra spending was resulting in better outcomes. Wrong again. In fact extra spending and extra services tended to be associated with worse outcomes. Do more, spend more, get worse results.

So the data’s being skewed by those doctors far away from the big academic centers who aren’t up to date? Nope. The Dartmouth crowd looked at care in the intensive care units of Americas best 100 hospitals as ranked by the venerable (but useless) poll in US News & World Report. The answer? Very sick patients in some academic medical centers (New York University, Cedars-Sinai in LA) were getting up to four times the service (e.g. procedures, tests, physician visits, etc) as similar patients as were others (Mass General, Mayo Clinic). And, as you’ve guessed by now, there was no perceivable benefit to patients or improvements in outcome. In fact probably the reverse.

Adding fuel to the fire, Wennberg’s colleague David Goodman laid out explicitly how many “surplus” physicians we have doing essentially make-work. This, at the same time as the medical establishment says that we have a physician shortage and are calling for the taxpayer to pay up by training more.

This academic bickering hit the real world in the mid-1990s when the Federal Agency for Health Care Policy and Research (AHCPR) put out some recommendations for back surgery suggesting that we were doing too much of it. That so enraged some back surgeons in Texas that they got their friends in the Republican party, which had just taken over Congress, to basically kill AHCPR–although it eventually re-emerged poorer and much more cautious as the Agency for Healthcare Research and Quality (AHRQ)

What’s important today is the way in which practice variation impacts hospitals and doctors. Medicare pays hospitals a fixed rate per admission based on particular diagnosis. But if the hospital needs to perform more services than typical because the patient is “sicker” than average, they get paid more for those exceptions. Well it’s not too hard to guess what happens next. Through the nineties several hospital chains including HCA, Tenet and St Barnabas in New Jersey were busted for essentially putting all their patients in this “outlier” category of people needing extra help. One hospital in the Tenet chain, Redding Medical Center in rural northern California, was doing so many unnecessary cardiac procedures on patients who weren’t sick that it skewed the overall national Medicare data! Now all those chains are paying off multi-million (and in some cases multi-billion) dollar settlements for their bad behavior. But as we’ve seen from the Dartmouth data, it’s not just a few bad apples – everyone’s doing it. And of course not everyone is getting caught so as everyone pushes the envelope the average intensity and cost of care goes up. What’s remarkable is that some regional, or organizational, medical cultures are conservative enough that they’re not playing along and in some ways leaving money on the table by doing less.

Want an example of how the system works to inflict misery on just about everyone? Last week the New York Times reported on the tiny community of Elyria, Ohio, which has a cardiology group doing angioplasties and implanting stents at four times the national average. And of course every procedure means that money goes from the taxpayer and employer to the physician and hospital because, as we’ve discussed, health care politics is really all about federal funding.

One apparently simple way to prevent this over-use is to give the physician and provider organizations a fixed pot of money to look after a defined population (in wonk-speak this is known as “capitation.”) Theoretically they’ll figure out what the right use of different procedures is, and provide services accordingly. We have a great example in our own backyard in California which operates this way – Kaiser Permanente. All their procedure rates are much lower than the national average, and their outcomes and satisfaction rates tend to be very good. What’s not to love?

Part of the problem with the Kaiser model, whether perceived or real, is that the doctors, who get to keep some of the savings at the end of the year, will skimp on necessary care. In recent years Kaiser set up a kidney transplant center in Northern California so that it could stop outsourcing expensive procedures (and outsourcing the dollars that paid for them). This turned into a complete debacle that along the way knocked several of its patients off the national kidney waiting list, and essentially killed them in the process. So there are potential problems with that model too. Kaiser certainly has its vocal critics who suggest that the Permanente Medical Group is calling the shots and cares more about money than patients.

But doctors have to get paid somehow. Mayo Clinic is frequently cited as the ideal. It pays its physicians a flat salary, and has an egalitarian management model. Its utilization numbers are conservative and its outcomes are fantastic. If everyone in America had Minnesota’s health care we’d be better off as a nation physically and financially, we wouldn’t have a doctor shortage (as they use fewer MDs per capita);and we’d easily be able to cover the uninsured with the savings.

To get American medicine from here to Mayo is a very long road. But it’s one that the more far sighted politicians are going to have to start looking at, before that elephant tramples around the room and starts seriously smashing the place up.

Share  Posted by Matt Holt at 7:48 PM | Permalink

<< Back to the Spotlight blog

Matthew Holt's bio
Email Matthew Holt




Get Our Weekly Email Newsletter




What We're Reading - Spot-On Books

Hot Spots - What's Hot Around the Web



Spot-on.com | Promote Your Page Too

Spot-on Main | Pinpoint Persuasion | Spotlight Blog | RSS Subscription | Spot-on Writers | Privacy Policy | Contact Us