Monthly Archives: January 2010

A friend – a highly respected health economist – expressed concern that my criticism of the Dartmouth group’s studies “is a justification to do nothing.” I told him that I, too, have been concerned that my critiques might be taken that way, but they shouldn’t. What I have tried to do is to prevent the wrong things from being done. Regulations based on geographic variation will do nothing to improve the quality curve. Quality is not geographic. But poverty is, and despite the Dartmouth folk’s denial, what the studies of geographic variation demonstrate is that poverty is a major contributor to health care costs. That’s why Mayo shuns poor Medicaid and Medicare patients. However, I have had an even bigger concern - that the Dartmouth group’s twisted logic would eventually be figured out, and its close association with the Orzag-Obama plan would undermine health care reform. It’s difficult to conclude that this was the problem in Massachusetts, but “lack clarity,” “arrogance of ideas” and similar expressions of distrust with health care reform have been cited as reasons for the election’s outcome. Twisted truths are not a basis for sound policy. We’ve got to get this right if health care reform is to proceed on a rational basis.

The favorite sound bite of Dartmouth disciples is to compare some high cost locale with a low cost locale. First it was Miami vs. Mayo, then Birmingham vs. Grand Junction, then Los Angeles vs. Green Bay and now it’s Los Angeles vs. Portland. This time, Tom Brokaw delivered the message on Meet the Press: “At UCLA Medical Center, they spend $92,000 on the last two years of a life, but in Portland, Oregon, just north of there (it’s actually 825 miles north of there), they spend $52,000 because they’ve got better controls on Medicare.  So until you begin to pay for value and pay for performance, health care reform is not going to work.”

What do Miami, Birmingham and Los Angeles have in common, and what do Rochester MN (home of Mayo), Grand Junction CO, Green Bay WI and Portland OR have in common. One thing is poverty. The maps below show the density of poverty in each (light green shows census tracks with 20-40% poverty and red shows tracks with >40% poverty).Miami, Los Angeles and Birmingham all have poverty ghettos. There certainly is poverty in the other cities, but not in ghettos. The dense poverty ghetto in central Los Angeles includes more than 2 million poor people.

So is it “better controls” or less poverty that results in lower spending. The first has a certain appeal, and we do seek better ways of doing things, but the latter is what’s really driving spending higher, and nowhere more vividly that in Los Angeles. Poverty is expensive, and ghetto poverty is really expensive. To paraphrase Mr. Brokaw, until you begin to solve the problem of poverty, health care reform is not going to work.