|Higher Standard Treating Chronically Ill Could Save Medicare $50 Billion
By benchmarking the treatment of chronically ill
patients in the last two years of life to the standards of the Mayo
Clinic Medicare could save $50.1 billion over five years, according to
a report from the Dartmouth Institute for Health Policy and Clinical
Medicare pays many hospitals and their doctors more than
the most efficient and effective healthcare institutions to treat
chronically ill people, yet gets worse results, the report said.
The new edition of the Dartmouth Atlas of Healthcare:
Tracking the Care of Patients with Severe Chronic Illness shows that
institutions that give better care can do it at a lower cost because
they don’t overtreat patients.
However, the report said Medicare and most other payers
encourage the overuse of acute care hospital services and the
proliferation of medical specialists thanks to misplaced financial
incentives, especially for treating chronically ill people.
Caring for people with chronic disease now accounts for
more than 75 percent of all healthcare spending. And overuse and
overspending is not just a Medicare problem — the healthcare
system as a whole lacks efficient, effective ways of caring for people
with severe chronic illnesses, the report said.
Lead author Dr. John Wennberg and colleagues Drs.
Elliott Fisher, David Goodman and Jonathan Skinner, studied chronically
ill patients because each year a third of Medicare dollars are spent on
them during the last two years of life.
Two-thirds of the people in the study were diagnosed with cancer, congestive heart failure and/or chronic lung disease.
Wennberg, a DMS professor of community and family
medicine, called for a crash program to learn how leading organizations
such as Mayo use fewer resources and spend less per capita than their
peers while receiving high marks on quality measures.
It isn’t so much what each medical service costs, the report said, it is how many services doctors prescribe.
Getting usage under control is the most critical factor in controlling costs, the researchers said.
The researchers discovered staggering variations in the
number of services that patients with severe chronic disease receive at
the end of life, depending on the hospital, region or state and not on
how sick they are.
For example, an elderly person spent an average 10.6
days in the hospital during the last two years of life in Bend, Ore.,
but 34.9 days in Manhattan. The variation is even more striking in the
last six months of life, when chronically ill patients visited the
doctor an average of 14.5 times in Ogden, Utah, compared to 59.2 times
in Los Angeles, the report said.
That creates wild variations in how much Medicare spends
on these patients. The US average was $46,412. The highest spending was
in New Jersey at $59,379 per patient, or a quarter more than the
average. The lowest was in North Dakota at $32,523 per patient, or a
quarter less than the average.
The research shows that hospitals, regions and states
that use more services per patient do not necessarily have higher
quality care. In fact, it is slightly worse, the report said.
The Dartmouth project studied the records of millions of
Medicare enrollees who died from 2001 to 2005 and had at least one of
nine severe chronic illnesses. Using those records, researchers
benchmarked care nationally to the care provided in the region where
Mayo has its flagship clinics and is the dominant healthcare provider.
Total spending for the population in this study was $289
billion over the five years. If the spending per patient everywhere
mirrored that in Mayo’s home region of Rochester, Minn., Medicare
could have saved $50.1 billion, or 17.3 percent of all spending on
these patients alone. A benchmark to a higher cost but efficient region
such as Sacramento, Calif., where labor costs are the 26th highest of
the 306 regions, shows Medicare would still have saved $28.9 billion.
The report said there are no guidelines for delivering
care and lacking these guidlines both doctors and patients believe that
more services — that is, using every available resource such as
specialists, hospital and ICU beds, diagnostic tests, imaging and the
like — mean healthier patients.
Based on this assumption, it is the supply of beds and
treatments and specialists — not how sick people are — that
determines how much they get used. The supply of services creates its
own demand, so regions with more resources have more usage and thus
Consider this comparison between the Mayo Clinic’s flagship St. Mary’s Hospital and UCLA Medical Center.
Spending: UCLA spent more than $93,000 per
patient over the last two years of life. The Mayo Clinic, by contrast,
spent $53,432 — a little more than half the amount of UCLA on
similar patients over the same period of time.
Utilization: Chronically ill patients in their
last six months of life had more than twice as many physician visits at
UCLA compared with Mayo, and they spent almost 50 percent more days in
Resource Use: Compared to the Mayo Clinic, UCLA
uses one-and-a-half times the number of beds, almost twice as many
physician FTEs in managing similar patients.
Address: Dartmouth Institute for Health Policy and Clinical Practice, 35 Centerra Parkway, Lebanon, NH 03766; (603) 653-0800, www.dartmouth.edu.