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Good Health Care for Less Money? Yup, Still Possible.

[Guest post by Jonathan Cohn]

Advocates for health care reform (including yours truly) have frequently argued that it is possible to reduce the amount of care without reducing the quality--or, to put it more simply, that less care doesn't have to equal worse care.

A story in today's New York Times may leave readers thinking that argument is bunk. It isn't. And while I'll have more to say on this soon--as it happens, I'm writing a longer column on this very subject--let me quickly explain the basics, since it's in the news.

The intellectual foundation for this argument about health care spending is a body of research, built over 30 years, by experts at Dartmouth University.  Led by a physician named John Wennberg, these researchers have looked closely at the wide variations in Medicare spending around the country. Seniors in Miami, for example, get a lot more care than seniors in Minneapolis. Yet, according to the Dartmouth studies, the Miami seniors didn't seem better off.  

Similar studies--some by Dartmouth researchers, some by counterparts elsewhere--have produced similar results and, eventually, Washington took notice. President Obama and his advisers cited Dartmouth data frequently when arguing for the Affordable Care Act.

But how solid is the research? The Times story, by Reed Abelson and Gardner Harris, suggests the data is less clear-cut than the politicians and some of their supporters let on. Sometimes, the Times writers say, higher spending really does seem to equal better care:

The mistaken belief that the Dartmouth research proves that cheaper care is better care is widespread--and has been fed in part by Dartmouth researchers themselves.
The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested. Cuts, if not made carefully, could cost lives.

I've long admired Abelson and Harris' work. They are right to highlight some of the ambiguities in the Dartmouth research--and the extent to which its more evangelical promoters gloss over them. But the fundamental argument of reform is not, as Abelson and Harris suggest, that cheaper care is better care. The argument is that cheaper care can be better care--or, at least, equally good care. And the evidence for that proposition is pretty overwhelming.

As another Times reporter, Robert Pear, noted last year, Medicare spends around $8,300 per beneficiary in the San Francisco area, and around $16,351 per beneficiary in Miami. But nobody argues (and there's no evidence to suggest) that South Floridians get care that is twice as good as what their Bay Area counterparts get. It's true that Dartmouth research didn't used to account for variables like the underlying health of the patients. In other words, it couldn't rule out the possibility that Miami patients were getting more care because they were sicker and needed it. But some of the the newer studies have adjusted for those variations and produced similar results, as Dartmouth's Jonathan Skinner noted last year in a blog entry for the Times:

...some regions of the country experience more illness than others, and of course sick people spend more on health care. To deal with this bias, the Dartmouth group has compared expenditures and frequency of treatment across regions for people with similar diseases. The most extensive study compared spending across regions using a variety of cohorts such as people who had suffered a hip fracture or heart-attack patients. This study examined people who were equally sick, whether they lived in Louisiana or Colorado. The researchers further adjusted for any differences in patient income, race, and prior health. They still found gaps of up to 60 percent in spending among regions.

Anecdotal evidence backs up this conclusion. In a celebrated New Yorker article from last year, phyisican and writer Atul Gawande compared medical practice in two Texas communities: McAllen and El Paso. Per patient, Medicare spent twice as much in McAllen, despite highly similar patient populations. But Gawande saw no evidence that the McAllen patients were getting better care, although he did see evidence they were getting more. Journalist Shannon Brownlee has many more stories like this in her (also celebrated) book Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer.

This journalism, like the Dartmouth research on which it draws, isn't perfect. Measuring quality of care is really hard and, almost by definition, any effort to do so will be subject to legitimate debate over the specifics. But it's difficult to take in all of this information and come away convinced that, overall, all or even most of that extra spending really means better health. (See, for example, these two blog entries from Merrill Goozner.)

The challenge for reformers is separating the good care from the wasteful care. Cut back on medical care crudely or too hastily and, in fact, you will leave a lot of people worse off. But I'm not particularly worried that the Affordable Care Act will do that, for reasons I'll explain soon.

In the meantime, via Brad DeLong, Skinner has posted a response to today's article.