Spending Among California Hospitals To Care for Medicare Beneficiaries Varies Widely; More Spending Does Not Always Equal Better Care, Study Says

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Palliative Care / Hospice Care
Article Date: 17 Nov 2005 - 0:00 PDT

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California hospitals vary in the amount of money they spend on health care for Medicare patients in the last two years of their lives, but more spending does not improve quality, according to a study published Wednesday in the journal Health Affairs, the San Francisco Chronicle reports. In the study, researchers from Dartmouth Medical School examined Medicare data from seriously ill patients at 226 California hospitals between 1999 and 2003 (Colliver, San Francisco Chronicle, 11/16). Researchers looked at medical costs in patients' last two years of life and the intensity of care provided in the last six months of life. The study found no evidence that longer hospital stays, more doctors and more intensive treatment prolonged patients' lives. Researchers noted that aggressive care in hospitals might have contributed to the patient's death based on previous studies that show hospitalizations can lead to infections and other potentially deadly complications (Ornstein/Lin, Los Angeles Times, 11/16). Researchers also said that patient satisfaction and quality measures declined as the level of care increased. Medicare reimbursements per patient "varied greatly among hospitals," with a wide disparity between costs in the northern and southern regions of the state, the Chronicle reports. Expenses in Southern California were significantly higher than those in Northern California, the report found (San Francisco Chronicle, 11/16).

Spending Disparities
The study found that Los Angeles hospitals spend the most on "often-futile" patient care in the last two years of life, the Los Angeles Times reports (Los Angeles Times, 11/16). Medicare spent on average $58,480 per chronically ill patient in Los Angeles County during the last two years of life, compared with $45,672 in the San Francisco Bay Area, $41,319 in San Diego and $34,659 per patient in Sacramento. The study estimates that Medicare could have saved $1.7 billion over five years if end-of-life care patterns in Los Angeles were similar to those in Sacramento (Wasserman, Sacramento Bee, 11/16). In addition, the study found that Medicare spending was higher in some hospital systems. For example, Sutter Health, which operates 27 hospitals in Northern California, spent $30,814 on average in the last two years of a Medicare beneficiary's life, and Tenet Healthcare spent $46,323. According to the Chronicle, the study did not address reasons for the spending disparities (San Francisco Chronicle, 11/16). However, John Wennberg -- principal investigator of the study and director of the Dartmouth Medical School Center for the Evaluative Clinical Sciences -- said, "In managing chronic illness at the end of life, providers serving Los Angeles relied much more on inpatient care, aggressive use of ICUs (intensive care units) and medical specialists and frequent referrals, while care in the Sacramento region was characterized by greater reliance on primary care and parsimonious use of inpatient care, physician visits and referrals" (Sacramento Bee, 11/16).

Implications
According to the Chronicle, the study suggests that "many hospitals are providing care that might be serving little purpose, thereby wasting money, equipment and staff time without improving patients' health." Some health experts said the study indicates that reducing unnecessary care, especially for the chronically ill, could lead to savings (San Francisco Chronicle, 11/16). The study also could "add fuel to the debate over the costs of end-of-life care," the Times reports (Los Angeles Times, 11/16). Researchers will release a similar study using nationwide data in January.

Published Response
In a response to the study published concurrently, Tom Priselac, president and CEO of Cedars-Sinai Health System, questioned whether the data was adequate to deem Sacramento a benchmark of care, the Bee reports. He wrote that such studies are "quite different than the reality of the real-time clinical setting" in part because they rely on hindsight (Sacramento Bee, 11/16).

Reaction
Elliot Fisher, a co-author of the study, said, "Most patients believe more is better in our current health care system. The evidence suggests more conservative practices are often better." Maribeth Shannon -- director of the hospitals and nursing home program for the California HealthCare Foundation, which funded the study with the Robert Wood Johnson Foundation -- asked, "If the outcome can't be explained by better quality, why are we paying extra for all these treatments and services?" (San Francisco Chronicle, 11/16). Shannon said, "We don't see this as intentional," adding, "There's certainly no fraud involved. But the differences don't matter from a patient perspective" (Sacramento Bee, 11/16). J. Thomas Rosenthal, associate vice chancellor of the David Geffen School of Medicine at the University of California-Los Angeles and chief medical officer UCLA Medical Center, said, "Is the medical use in Los Angeles higher than it is in Sacramento? The answer is yes. Do we think there's substantially better health care in Los Angeles that would justify all the extra use? The answer is no." However, Rosenthal added, "When you get it down to individual hospitals, it's a much tougher call" (Los Angeles Times, 11/16).

The study is available online.

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