Monthly Archives: March 2010

Readers interested in the relationships between health care and poverty will want to read several new postings on the Web.

One is an article about my Rhoades Lecture (view slides here) given to  the Medical Society in Detroit. It’s entitled “Poverty and Health Care in America.”

Second is by James Marks, MD, MPH, Vice President of the Robert Wood Johnson Foundation, entitled “The Poor Feel Poorly.” It is posted on the Huffington Post site.

Third is “Health and Health Care in America’s Poorest City,” a tragic and dramatic portrayal of America’s failures to its own in Detroit.

Finally, here is a link to a collection of papers on social inequalities in health by the McArthur Network on SES and Health, published by the New York Academy of Sciences under the title, “Biology of Disadvantage.”

A thoughtful physician from Everett WA asked a perceptive question about the redistribution of Medicare payments from “low efficiency” to “high efficiency” areas, for example from South Bronx to Mayo, or, in the example that he gave, from Miami-Dade County to King County WA, the home of Microsoft. “Maybe I am wrong, but I think this was intended to reward high-quality, low-cost care.”  

You’re not wrong. That was the stated purpose. But it simply rewards wealth and penalizes poverty. Costs are lowest where poverty is least, and quality follows. It’s best where poverty is least. High poverty areas (like Miami) have poorer and sicker seniors (see the chart below). The opposite is true for wealthy places with little poverty, like Everett and the surrounding King County.

This is not to say that there’s not waste in Dade and efficiency in King. Both may be true. It’s just that the income effect is so large, it swamps the others.

The final House “Manager’s Amendment to Reconcilliation“  provides $400M for hospitals located in counties in the lowest quartile of Medicare spending, adjusted for age, sex and race but not income. Coupled with annual cuts of $10B in DSH and $1.5B for readmissions, this is bad news for the poor and the hospitals that care for them. Mayo wins!   

Note that adjustments cannot be based on counties. Urban counties are too big and economically varied. When the extremes of wealth and poverty are averaged, mean household income is 128% of average in Washington DC, 113% in LA and 108%  in Chicago (Cook County), all with dense and costly poverty ghettos. Without any poverty, mean household income in Olmsted County (home to Mayo) is the same as in LA. Very few truly poor counties will qualify for such payments. This is another example of the truism that “Poverty is the Problem; Wealth is the Solution.”

 Joanne Laurier from the World Socialist Web Site (WSWS) interviewed me recently about Poverty, Health Care Reform and the Dartmouth Atlas. Here’s what I had to say:

“There are basically two problems with the Dartmouth group’s approach. One is methodological and the other is ideological. Although they are quick to point out that they have published 100 papers, these are based on only a few methodologies—and each is flawed. I’ll get into what’s wrong with their methodology later.

But even if they were right, they’re burdened with another problem—ideology. It’s not unusual for policy research to be burdened in this way. In the case of Dartmouth, it’s to an extreme. And, worse, through Peter Orszag, director of the Office of Management and Budget, their ideology has become the cornerstone of health care reform.

It was John Wennberg and his associate, Elliott Fisher, who led Orszag and others to believe that studies of geographic variation prove that doctors and hospitals over-treat and over-charge, to no benefit. And it was they who proposed the 30 percent solution, claiming that the money needed for health care reform was easily available—no new taxes would be required (as President Obama had promised).

If only health care were “more efficient,” the nation could save 30 percent of health care expenditures, $700 billion annually. And to create that “efficiency,” all that was needed was to force all providers to function like the Mayo Clinic (which cares predominantly for white, middle-class patients) and to utilize more primary care physicians (which Mayo doesn’t).

That’s what I call the sin of commission—the tragedy of misleading the process of health care reform. There’s a second sin—the sin of omission, or obfuscation. It’s not simply that the Dartmouth work on geographic differences is methodologically wrong and its conclusions incorrect, nor simply that its policy implications misdirected health care reform. It’s that there is another explanation for the geographic differences, which has to do with differences in the distribution of poverty.

So all the while that they talked about saving money by reducing wasteful geographic variation (by providing less care where it’s actually needed), the fundamental needs of the poor and the large added costs of caring for them were ignored.

It’s actually worse. Poverty was denied, because it couldn’t be both ways. Either the Dartmouth group was right and the high costs in some areas were because of too many specialists and hospitals doing too many unneeded things, or this higher spending was due to the added costs of caring for the poor. The truth is that it is the latter.

Therefore, the only way to really save money is to make a long-term commitment to ameliorating the high health care costs that are a result of poverty and other social determinants of disease. Not that there aren’t inefficiencies. But physicians have been dealing with inefficiencies as long as I’ve been a doctor—which is 50 years—and certainly before that.

As medicine evolves, there are always more inefficiencies to deal with, but as fast as we deal with them, new ones emerge. So constant diligence is necessary. But is medicine more efficient than in 1960? You bet it is. And is poverty a bigger problem for health care spending now than it was then? You bet. We seem to know how to make things more efficient. But as a nation, we aren’t very good at reigning in poverty. It just grows.”

 Read more on the WSWS Web page.