Healthcare Spending v. Quality

by Bradley Miller on June 9, 2009

There is an interesting story brewing in the whole healthcare debate.  Now that we’re past the nice-ities and the pie-in-the-sky promises of the election cycles, we’re starting to get in to the meat of the healthcare debate and ecosystem.   And in that I mean that we’re starting to see the self-interests of the insurance companies (payers) and providers (docs, nurses, special interest groups, etc) and politicians converge in all the glory that is the healthcare debate.

A great example of this was written in the NYTimes today in an article entitiled “Health Care Spending Disparities Stir a Fight.”  In it the authors detail (at a pretty high-level) the debate over healthcare quality versus spending.  Particularly they focus on a long-standing project called the Dartmouth Atlas (DA), which is based out of Dartmouth’s medical School and headed by a doc named Elliott Fisher.  The DA is essentially an impressive data mining project where medicare data is crunched by rooms full of computing power up in Hanover, NH.  Their findings, funded largely by federal grants, are freely and readily available for download at their site.  I’ve actually had the pleasure of working with Dr Fisher in the past and a number of his colleagues on a couple of projects for Mercer Health.

In those projects we specifically dissected the DA by metropolitan service area.  Here’s where the rub and disingenuous aspect to the politicians and providers arguments – and, yes, I’m singling out the comment from Cedars Sinai here – the DA pulls the raw claims data from the complete Medicare database.  It shows which patients have received what type of care and for how much.  True, there are definitely statistical errors and some methodology issues, but those are pretty much the same across all providers.

What we found was that in 10 different US metropolitan areas you could easily break down and detail which hospitals were delivering high quality care for the least cost.  Mind you, this is the same care/procedures/tests as the more expensive hospitals, but for much less moolah.  And, to boot, research has shown (still searching for the right citation here, but it exists) that those high quality indicators lead to better outcomes AND less spending over the long term.  It’s pretty much a win-win type of situation.

What I’m suggesting is this, rather than looking for miracle cures for healthcare spending, such as healthcare IT, and begin to look at how we practice and the right practice behaviors that lead to better outcomes and, ultimately, savings.  Michael Porter, yes, that same 5-forces guy, published an interesting piece in the New England Journal on June 3rd.  While I don’t necessarily agree with all of his points, I do believe that he’s hitting on the fundamental notion that we need to look deeper than just cutting costs and fully examine and question the way medicine is practiced and the way healthcare is administered.

The Dartmouth Atlas, if you take and dissect its data, details that some hospitals perform as well or better than their more expensive counterparts, indicating that we can do this for less and that all starts in the fundamentals of how we practice medicine and healthcare.  To me this means all players being open, willing to look deeply at their own practices and business behaviors and make alterations that are realistic and friendly to the market.  Without being honest with themselves, it might just come down to legislators making the rules, and that’s something that none of us really want.

Leave a Comment

Previous post:

Next post: