Diagnosis: Too Much Medicine, Not Enough

Posted April 23, 2004 at 6:06pm

Real health care reform is being held back by a false assumption, which is shared by practically everybody from patients to doctors to lawmakers. Most of us assume that more (and more expensive) medical care equals better care — and better health. Two separate bills, one introduced by Rep. Patrick Kennedy (D-R.I.) and the other by Sen. Hillary Rodham Clinton (D-N.Y.), cut through the noise and overturn this notion.

Yes, that’s right, Hillary Clinton. But before you shoot the messenger, forget for a moment who is delivering the prescription and consider the diagnosis.

One of the biggest — yet largely unacknowledged — flaws in the U.S. health care system is the high rates of unnecessary care.

A recent study looking at regional variations in per capita Medicare spending by Elliott Fisher and colleagues at the Dartmouth Center for the Evaluative Clinical Sciences provides a snapshot of the problem. They found that Medicare spending per enrollee varies by as much as 60 percent across different regions. In 2000, for example, Medicare spent on average $10,550 on each recipient in Manhattan, but only $4,823 per capita in Portland, Ore.

The difference between high-spending regions like Manhattan and low-spending regions like Portland are not due to differences in underlying health of patients, but rather to how physicians in different regions practice medicine. Medicare recipients in Manhattan spend twice as much time in the hospital per year, and visit the doctor’s office twice as often as their counterparts in Portland. Medicare pays for enrollees in high-spending regions to receive more discretionary care, more visits to specialists, more diagnostic tests and more minor surgical procedures.

Are Medicare recipients in high-spending regions healthier or more satisfied as a result of all that care? No, quite the opposite. The quality of care across regions varied widely, but it was no better in high-spending regions than in low-spending places, and in some ways it was worse.

But what surprised Elliott and his colleagues most was the discovery that more health care led to worse, not better, outcomes. Medicare enrollees in high-spending regions suffered a 2 percent to 5 percent higher rate of mortality.

The differences in spending across regions were not due to differences in reimbursement rates. Rather, physicians in high-spending regions were overtreating their patients.

This study and others like it have important implications not only for Medicare, but also for the system as a whole. The best estimate is that as much as 30 percent of our health care budget goes toward overtreatment. That’s more than $500 billion this year, and it will amount to an estimated $7.4 trillion over the coming decade.

Why do doctors overtreat? They will tell you they are practicing “defensive medicine,” that patients are more likely to sue a doctor who fails to provide care than one who kills or injures a patient by providing too much. Patients also demand much of the excess care they receive, asking for drugs they see on television.

All of which is true. But doctors and hospitals also have pecuniary incentives to overtreat, because they are paid more only when they do more. As Arnold Relman, former editor of the New England Journal of Medicine, puts it, “Like any piecework system, fee-for-service medicine provides powerful economic incentives to increase output.” As it stands, the system effectively rewards doctors and hospitals that overtreat.

Health care providers also deliver too much care because they have astonishingly few objective measures to tell them which procedures, tests, surgeries and drugs actually work, which don’t, and which are of only marginal benefit.

Much, perhaps even most, of the medical care delivered today is based more on intuition than science. Physicians don’t know whether the prostate specific antigen, or PSA test, saves lives, but they recommend it anyway.

Amazingly, they don’t yet have real data to show that relatively healthy people whose only risk factor for heart disease is elevated cholesterol will benefit from taking cholesterol-lowering medication, the most widely prescribed class of drugs on the market.

According to a recent RAND Corp. study, even when evidence exists, providers fail to use it 45 percent of the time.

This dearth of information creates a health care market filled with inefficiencies, which help drive up costs. Patients cannot choose the best care or the best providers because nobody really knows what high-quality care is or who is delivering it — U.S. News & World Report’s “America’s Best Hospitals” notwithstanding. Employers and insurers — whose costs keep rising — have little data with which to judge the effectiveness of all the hospitalizations, tests, office visits, and drugs they are paying for, and thus little rational basis for adjusting reimbursement according to the quality of care.

You wouldn’t buy a car or a dishwasher without first looking at a consumer report, but that’s effectively what health care consumers are forced to do every day.

More information would increase the quality of health care and the efficiency of the system — but most insurers don’t have the expertise, the money or the motivation. The National Institutes of Health is too focused on basic biomedical research to scrutinize existing medical practices, or to fund all the head-to-head drug trials that are needed to sift through the hype put out by the pharmaceutical industry.

The Agency for Health care Research and Quality provides some outcomes data, which helps insurers and patients distinguish between effective and useless care. But its budget is too small and its mandate too precarious to have much effect on our behemoth health care system. Recall that in its former incarnation, AHRQ saw its budget slashed by Congress after a determined group of doctors lobbied to have the agency killed, because of a study showing one of their most lucrative procedures was ineffective.

Clinton and Kennedy’s plans will appeal to both health care providers and consumers, because they look on the surface like information technology bills aimed at bringing the antiquated record-keeping of doctors’ offices and hospitals into the 21st century. That’s essential, to be sure. But the deeper significance of these bills is they focus attention on the desperate need for getting more evidence into our health care system — and reining in costly overtreatment.

Shannon Brownlee is a senior fellow at the New America Foundation.