Monthly Archives: June 2009

The “Dartmouth Honorary Clause” (Section 1123) of the House of Representatives discussion bill provides an incentive payment of 5% for suppliers of medical services in the 20% of counties that have the lowest Medicare expenditures.  Are these counties distinctive in any other way? Well, yes. While they spend 40% less per enrollee on Part A services and 25% less on Part B than the highest-cost 20%, they have smaller populations (only ¼ as many Medicare enrollees as in the high-cost counties) and much less poverty (60% lower DSH payments per enrollee than in the high-cost counties). So there’s not much chance that the high-cost 20% will get that 5% boost. They just have the wrong demographics. Darn, all those poor people.

This time they almost got me. I couldn’t really figure out why McAllen spends more than El Paso. But give me some credit. I figured out (1) why states with more specialists have poorer quality (they don’t; it’s phony statistics); and (2) why states with more Medicare spending have poorer quality (because many states with the most Medicare spending have low total spending, which is the determinant of quality); and (3) why nothing was necessarily better among the Medicare quintiles (because they were distributed randomly with respect to total spending); and (4) why there are more knee replacements in Minnesota than in Massachusetts (rather interesting because it’s backwards – Minnesota is supposed to be the land of sky-blue spending, but it’s in the bowl of high knee replacements) and (5) why health care outcomes in the US are the poorest in the world (because the Union won the Civil War and got the Confederacy, where health care spending is low and outcomes are poor); and (6) why women in Lewiston, Maine had more hysterectomies than women in nearby Wiscassett (because Lewiston is heavily Catholic, while Wiscassett is almost entirely Protestant, and the ladies of Lewiston used hysterectomies as a form of birth control that was acceptable to the Church.); and (7) why there are such great differences in resource use among academic health centers (because the ones with lowest use are in college towns, while the high-users are in major urban centers); and (8) why California’s academic medical centers differed so widely in resource use (because their patient populations had such different risk and income levels); and (9) why Medicare spending in Miami is not like Minneapolis (because Miami is as poor as the wards in Chicago where President Obama worked, and expenditures among the poor are vastly greater); and (10) why the use of oxygen equipment is higher in some states (because the higher use states are at higher altitudes, where folks with COPD need more oxygen); and (11) why Birmingham spends more than Grand Junction (because Birmingham has a 55% higher prevalence of major illness, double the poverty and 76% blacks, while Grand Junction has 0.6% - – in fact, Grand Junction is pretty much like Green Bay, the most recent poster child of efficiency); and (12) why mortality is lower in states with more family physicians (because they’re mostly in the upper Midwest, where there are fewer blacks, low poverty rates and longer life expectancy). But I couldn’t quite figure out (13) why McAllen spends more than El Paso, although others have made interesting suggestions. And then along came Dan Gilden, who showed that it’s simply a matter of disease burden. Sicker people use more care. So it’s 13 for 13 — not bad (with a little help).

Gawande’s New Yorker article has become required reading. But is McAllen a microcosm of American health care? Or is it a curiosity. I’m afraid it’s the latter. McAllen  is unique.  Read what McAllen’s physicians have to say about it. It’s at the most southern tip of Texas  in a county with 725,000 people, 90% of whom are Hispanic – one of the poorest counties in the nation. But because of NAFTA, McAllen is the fastest growing community in the nation. People and money are pouring in from the north and across the border, and there’s also a great deal of cross border activity – working in one place, living in the other and shopping in McAllen on the way back. The in-pouring of wealth has fostered high-tech medical facilities – cancer centers, heart institutes, psych units, rehab units – big city medicine in the middle of nowhere. Entrepreneurism abounds, in retail, real estate and medical care. Yet 36% of the population is below the poverty line, including almost 25% of the Medicare population, whose outcomes are poor, not just in McAllen but everywhere. So, there a collision of abundant health care resources related to burgeoning wealth and massive utilization related to profound poverty — an extreme example of the affluence-poverty nexus. A Monty Python version US health care.

Possibly unaware of the connection, Gawande described the poverty effect in a previous New Yorker article, about the “Checklist.”  That project took him to Detroit’s Sinal Grace Hospital, which the Dartmouth group had criticized as a hotbed of waste and inefficiency due to an overuse of supply-sensitive services. What Gawande stumbled into was quite different: “Occupying a campus of red brick buildings amid abandoned houses, check-cashing stores and wig shops on the city’s West Side, Sinai-Grace is a classic urban hospital.  It has eight hundred physicians, seven hundred nurses and two thousand other medical personnel to care for a population with the lowest median income of any city in the country.”  It is little wonder that its patients consume more resources, but such consumption is unlikely to result from “the overuse of supply-sensitive services.” Indeed, what the suppliers desire most is fewer demands on their already overworked lives. As in Chicago, poverty matters.

One last word, and it’s for the President. Health care reform is on a failure course because ideologues are twisting anecdotes into policy. I want you to succeed. I want the nation to succeed. Making McAllen required reading is not the way to do it.

Wisconsin is in the press. Green Bay spends less than Los Angeles. Why does Wisconsin do so well? Yes, the folks are terrific. I was born and bred there and was dean of the Medical College of Wisconsin, so I know something about it, and I’m proud of Wisconsin. But I also studied it. Wisconsin does well in health care because of its favorable demographics and its prosperity. Few uninsured, good Medicaid coverage, excellent employer-sponsored insurance and moderate Medicare spending and low per capita spending overall, almost everywhere. But not in the Milwaukee region — spending is 30% greater than in the rest of the state. Why is that?  The answer is that it’s a complex urban environment, not as complex as Chicago or Los Angeles, but complex enough. It also turns out that Milwaukee is profoundly segregated. That allowed us to carve out what we termed the “poverty corridor,” where more than 90% of blacks and 75% of Latinos live and where poverty abounds. Hospital admission rates in the “corridor” were 66% higher than in the rest of Milwaukee, and they accounted for the entire difference. The Milwaukee region without its poverty corridor is like the rest of the state. Move the corridor to Green Bay, and Green Bay’s health care would resemble Newark’s. This should be familiar to the President. Milwaukee’s poverty corridor is like Chicago’s 17^th and 20^th wards, where the President worked. He knows about poverty. So let’s stop the Dartmouth doubletalk and start addressing the root cause of variation in spending -– p-o-v-e-r-t-y.

According to a leader of Dartmouth’s Health Policy group, “if we sent 30% of the doctors in this country to Africa, we might raise the level of health on both continents.” Sadly, the notion that 30% of health care resources are wasted underlies much of the current thinking about health care and serves as a beacon for President Obama’s health care reform team. Where did it come from?  

MEDICARE IS NOT A PROXY.  The “30% solution” emerged from a Dartmouth study that divided the nation into five “Medicare-spending quintiles” and compared outcomes, such as access, satisfaction and mortality, among them. But these outcomes are not patient-specific, nor are they Medicare-specific. They reflect community-wide characteristics that depend on the total resources available from all payment sources, not just Medicare.  Nonetheless, if Medicare is representative of the whole, as claimed, it would be a valid proxy. But it isn’t. As is apparent from the graphics below, Medicare spending bears no relationship to total spending per capita. But, as I’ve demonstrated, it is total spending per capita, not Medicare spending, that correlates with better outcomes, such as access, quality and the use of mammography. Thus, the fundamental basis used by the quintiles study to determine a community’s level of care - Medicare spending - is flawed. 

QUINTILES ARE NOT RANDOM.  Assuming that Medicare is representative, a valid assessment of outcomes would require that all other characteristics that might affect outcomes would have to be the same.  But even a casual inspection reveals how different they were. The highest-spending quintile was composed principally of dense urban centers, such as Chicago, Detroit, New York, Miami, Houston and Los Angeles, plus some smaller regions with extremes of affluence and poverty  The lowest-spending one stretched across the northern tier, from Alaska through Washington and Oregon to Maine, and into the plains, half the land mass of America. Why possibly could be learned by comparing such dissimilar regions? 

AGGREGATION AND AVERAGING MASKED DIFFERENCES.  Despite these dissimilarities, the quintiles were all the same. How is that possible?  The answer lies in the process of aggregation and averaging. Because each quintile contained hospital regions with a diversity of total health-care spending (despite similar Medicare spending) and a diversity of subpopulations, their averages were similar.  The extremes of affluence and poverty and of high and low spending in the highest-Medicare spending quintile resembled the lowest, and like Lake Woebegone, everyone was above average.  

STRINGING IT ALL TOGETHER. The Dartmouth group turned the fact that nothing was “necessarily better” into “it’s worse because it isn’t better.” Therefore greater levels of Medicare spending (despite the similar levels of total spending) must have been wasted. And because the differences in Medicare spending were “unexplained” (although they are readily explained), they must have been due to the overuse of “supply-sensitive services.” And these must have resulted from an over-supply of specialists. And, therefore, if the numbers of specialists were no greater in the high-spending than low-spending areas, the nation could save 30%.  

And by stringing together these politically-charged phrases, the Dartmouth group succeeded in recruiting large numbers of believers — even an economist as brilliant as Peter Orszag, Director of OMB, asked, why can’t Newark be more like Minnesota?  

But what the Dartmouth group really strung together were three profound errors: 1) Medicare is not a proxy for the whole; 2) the populations in each quintile were not random, and 3) aggregation and averaging masked real differences among population groups.  Like Churchill’s Russia, the quintiles study was “a riddle wrapped in a mystery inside an enigma.” But the riddle has been solved. When critically examined, geographic variation in health care is seen to reflect the interplay between communal wealth and individual income. And the poignant reality that emerges is the powerful and tragic effects of poverty on health care utilization and outcomes (see “Let’s Talk About Poverty” April 23).