Wednesday, June 10, 2009

Politics intrude: Regional variations in health spending II

An article on June 8 discussed political reactions to the New Yorker piece I blogged about last week. Apparently the article got the attention of White House policymakers.

It is absolutely right that the Dartmouth Health Atlas research to which many folks (not the article so much) refer doesn't yet offer a positive result. All it points out is that there are vast differences between cities, counties, and states in Medicare spending. Gawande offers a suggestion about what he thinks may be driving it: the profitability to individual doctors of running more tests and getting reimbursed.

It seems to me that vast harm could descend from policies that seek to level the spending field while not attacking root-level reasons. Suppose we capped Medicare payments. If it's an annual cap, it's clear that profit-seeking doctors would just accelerate their procedures and claims to be the first to be reimbursed. Same probably for a monthly cap. If it's a per-hospital cap, that sounds more watertight, but it wouldn't prevent doctors from closing up shop and moving elsewhere, presumably under the radar once again.

If it's an evidence-based cap with data on initial underlying health conditions and outcomes, that would seem like a better solution. Sicker populations ought to get more spending and would under such a system. (This leaves aside the sticky question of whether you're maximizing life years, in which case you might not necessarily want to spend more on the sick, or pursuing social justice.) But the data and reporting requirements for such a cap would be large, and there's no guarantee doctors and hospitals would report it accurately.