NUMBER OF THE WEEK: June 14, 2009
Doctors and the Cost of Care
As the debate over health care reform unfolds, policy makers and the public need to focus more attention on doctors and the huge role they play in determining the cost of medical care — costs that are rising relentlessly.
Doctors largely decide what medical or surgical treatments are needed, whether it will be delivered in a hospital, what tests will be performed, and what drugs will be prescribed or medical devices implanted.
There is disturbing evidence that many do a lot more than is medically useful — and often reap financial benefits from over-treating their patients. No doubt a vast majority of doctors strive to do the best for their patients. But many are influenced by fee-for-service financial incentives and some are unabashed profiteers.
All Americans are affected. Those with insurance are struggling to pay ever higher premiums, as are their employers. If the government is going to help subsidize coverage for the millions of uninsured, it will need to find significant savings in Medicare spending, at least some of which should come from reducing over-treatment. In the long run, if doctors can’t be induced to rein themselves in, there is little hope of lasting reform.
A glaring example of profligate physician behavior was described by Atul Gawande in the June 1 issue of The New Yorker. (His article has become must reading at the White House.) Dr. Gawande, a Harvard-affiliated surgeon and author, traveled to McAllen, Texas, to find out why Medicare spends more per beneficiary there than in any other city except Miami.
None of the usual rationalizations put forth by doctors held up. The population, though poor, is not sicker than average; the quality of care people get is not superior. Malpractice suits have practically disappeared due to a tough state malpractice law, leaving no rationale for defensive medicine. The reason for McAllen’s soaring costs, some doctors finally admitted, is over-treatment. Doctors perform extra tests, surgeries and other procedures to increase their incomes.
Dr. Gawande’s reporting tracks pioneering studies by researchers at Dartmouth into the reasons for large regional and institutional variations in Medicare costs. Why should medical care in Miami or McAllen be far more expensive than in San Francisco? Why should care provided at the U.C.L.A. medical center be far more costly than care at the renowned Mayo Clinic?
After adjusting for differences in health, income, medical price and other factors, the Dartmouth researchers’ overall conclusion is that the more costly areas and institutions provide a lot more tests, services and intensive hospital-based care than the lower cost centers. Yet their patients fare no better and often fare worse because they suffer from the over-treatment.
The Dartmouth group estimates that up to 30 percent of Medicare spending is wasted on needless care.
Although most experts think the Dartmouth research is essentially right, a few believe that other factors, including the health of individual patients, play a bigger role. Even if the over-treatment is less than the Dartmouth researchers believe, their findings point to areas and institutions where Medicare should be able to coax or push physicians to behave more prudently, for all their patients.
When President Obama speaks at the annual meeting of the American Medical Association on Monday he will need all of his persuasive powers to bring doctors into the campaign for health care reform. Doctors have been complicit in driving up health care costs. They need to become part of the solution.