A Painless Way To Hold Down Health Costs?

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NPR reports on a way to reduce national health care costs: "Getting doctors and hospitals in the parts of the country that spend the most on medical care now to bring that spending more in line with that of lower-spending regions." Researchers at The Dartmouth Atlas of Health Care "have found two key points. First, it's clear that patients who live in the lower spending areas do just as well as those where spending is higher. But just as important, more is not always better: Sometimes more spending can lead to worse outcomes." In lower-spending areas, "more care tends to be provided by primary care physicians, and patients in those areas are much less likely to spend time in the hospital for care that could be provided elsewhere." But "Patients in those higher spending communities are twice as likely to have 10 or more different physicians involved in their care. … And it's really hard for physicians to maintain effective communication when there are so many more of them involved in a patient's care," says Elliott Fisher, principal investigator for the Dartmouth Atlas.

"[Fisher] and other experts want Congress to implement new payment systems that would encourage doctors and hospitals to work together and give them bonuses for keeping patients healthy, and thus using fewer expensive services." But Joe Antos of the American Enterprise Institute says, "The problem is, we don't know how to do it," he says. "What we're really talking about is changing the way medicine is practiced. And that is not a price issue. That is a cultural issue. That is a cultural issue among providers and a cultural issue among their patients as well." Antos says financial incentives are a good idea, and "Congress should proceed with changes to the payment systems. It just shouldn't count on the savings coming in the near future" (Rovner, 6/29).

The Kansas City Star reports that the city may be able to provide Washington with a model for how to fix a critical element for health care reform: bringing down exploding health care costs: "Kansas City ranks in the bottom third for per-capita Medicare spending among major hospital regions. And while Medicare costs are growing, at 2.9 percent a year, that is significantly slower than the national rate." It notes: "Kansas City does seem to be playing it smart about how it uses its health care resources. Local initiatives - from 'report cards' on doctors to community discussions of end-of-life care - are improving health care quality and keeping costs low." The paper also emphasizes the city's collaborative spirit in the health care industry and that area doctors are prudent about how they use the technology and facilities at their disposal.

The paper puts the city's performance into larger context of health care reform and disparities in care by using Dartmouth Atlas research: "Washington has started looking to localities where health care costs are low for ways to put a damper on runaway spending nationwide. The potential savings are enormous. Medicare spent $16,351 on its average enrollee in Miami in 2006 - more than twice as much as the $7,604 spent in Kansas City. Extreme regional differences abound: $8,331 per enrollee in San Francisco versus $10,810 in Los Angeles, for example."

The paper reports that Kansas City shares some of the key characteristics of other low-cost areas such as having physicians on salary as well as home-grown initiatives that include doctors getting feed back on performance, involvement by the business community and doctors discussing end-of-life care with patients and families (Bavley, 6/27).

This information was reprinted from kaiserhealthnews.org with kind permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery at kaiserhealthnews.org.

© Henry J. Kaiser Family Foundation. All rights reserved.