Getting Past Denial — The High Cost of Health Care in the United States

GettingPast Denial — The High Cost of Health Carein the United States Jason M. Sutherland, Ph.D., Elliott S. Fisher, M.D., M.P.H., and Jonathan S. Skinner, Ph.D. http://healthcarereform.nejm.org/?p=1739&query=TOC

From Medicare data • Sick people require far more care than healthy people. • Poor people require more care than rich people.

Individual and Regional Factors • Contribution of individual and regional factors to the regional differences in price-adjusted health care spending. • Survey respondents were categorized into five equal-sized quintiles on the basis of the average intensity of care in their region (www.dartmouthatlas.org ).

Regional Differences • Regional differences in poverty and income explain almost none of the variation. • Health status does matter — it accounts for $593 of the $3,280 difference between the lowest- and highest-intensity regions, or just about 18%. • But that leaves more than 70% of the differences in spending that cannot be explained away by the claim that “my patients are poorer or sicker.”

Utilization Rates

How do we define C*? The Economics - Argument MB • Some of the care “must” be unnecessary. • Outpatient v. Inpatient care. • Watchful waiting v. expensive tests. MB, MC MC C* Care

The Economics - Argument MB • If C* is correct then we have losses if we have “too little” or “too much” care. • Consider C1 or C2. MB, MC Too Little MC Too Much • Authors argue (implicitly) that if C* is “correct” and everything else is too much, we could save a lot of money and spend it on other things. C2 C* C1 Care

Getting Past Denial — The High Cost of Health Care in the United States