Myth 33. Reducing geographic disparities will reduce spending without sacrificing quality.

The cure for excessive U.S. medical spending, according to prominent academics as well as Peter Orszag, director of the Office of Management and Budget (OMB), is called the “30% solution.”

Its basis is the Dartmouth Atlas, produced by the Dartmouth Health Policy Group, whose leaders concluded that “if we sent 30% of the doctors in this country to Africa, we might raise the level of health on both continents.”

The recently passed House reform bill, H.R. 3962, would implement the Dartmouth Atlas by force of law, writes Louis Keeler, M.D., past president of the Medical Society of New Jersey, referring to sections 1157–1160, pp 497-520.

What the Dartmouth group did was to divide the U.S. into quintiles based on levels of Medicare spending. It found that outcomes were the same or better in the lower-spending areas.

The Group claimed to have adjusted the data for age, sex, mortality, disease incidence, and prices. The cause of spending differences “must therefore lie in how physicians and others respond to the availability of technology, capital, and other resources in the context of the fee-for-service payment system,” conclude Elliott S. Fisher, M.D., of Dartmouth, and coauthors (N Engl J Med 2009;360:849-852).

Other academic agree: It is “well-established” that higher spending in some regions does not translate into higher quality (Chernew ME, et al., N Engl J Med doi:10.1056/NEJMp0910294).

“What we now know about regional variation in costs within the United States suggests that nearly one third of health care costs could be saved without depriving any patients of beneficial care, if physicians in higher-cost regions ordered tests and treatments in a pattern similar to that followed by physicians in lower-cost regions” (Brody H, N Engl J Med doi:10.1056NEJMp0911423).

Physicians, Brody writes, are not “innocent bystanders” watching costs zooom out of control.

“Unproven or unnecessary medical interventions should not be available in any system,” writes Allan S. Brett (N Engl J Med 2009;361:440-441).

The Dartmouth analysis has, however, been subjected to a devastating critique by The Physicians’ Foundation, led by Richard A. Cooper, M.D., former dean of the Medical College of Wisconsin.

Dartmouth’s “adjustments” are “all shadows and mirrors, or simply malarkey,” writes Dr. Cooper. The Dartmouth adjusted data looks very much like unadjusted data from MedPAC (Medicare Payment Advisory Commission).

The main source of disparity is poverty, the report concluded, noting that the poorest 15% of Americans consume twice as much medical care as the richest. The “30% solution” would reduce the volume of care in communities where the need was greatest.

The “poster child” for the Dartmouth solution is a study comparing Birmingham, Alabama, with Grand Junction, Colorado. Cooper points out that if Alabama had the resources to provide all needed care to its citizens, utilization should not have been 34-48% higher in Birmingham compared to affluent Grand Junction, but rather 100% higher.

One of the “unexplained” regional variations is in the use of home oxygen supplementation for patients with chronic lung disease. It is indeed higher in some states—those where patients live at higher altitude and thus need more oxygen.

The short summary of the report: “Dartmouth strikes again—at poor people.”

Additional information:

  • “Quality or Death,” AAPS News, November 2006.
  • 4 thoughts on “Myth 33. Reducing geographic disparities will reduce spending without sacrificing quality.

    1. The AAPS “Myth” series is one of the most refreshing things in medicine since the sponge bath.

      It is clear what the most obvious “product” of washington is…..DECEIT


      John R. Minarcik, MD
      aka, “washingtondeceit” on youtube

    2. The bottom line is that Sarah Palin is right, there will be “Death Panels.”

    3. A greater problem for the costs is a medical education system that doesn’t teach proper evaluation of patients, and a medical legal system and ‘experts’ pushing defensive medicine approach. I am in Iowa, we have ‘low costs’ and ‘high quality measures’. The rural parts of Iowa have less likelihood of a given accusation to end in a payment in a given med malpractice case than most areas in New York, so there is less defensive medicine practiced. And nothing will be done about that. Could someone look at med malpractice data vs. cost/patient and see if there is a relationship there?

    4. Czar care dictaes from statistics, averages.
      You heard about the statistician who drowned, wading a stream that AVERAGED one foot depth? People are different. Most of my patients now have already received pre-paid , standard “care” from Kaiser, ER or Medicaid – but it didn’t fit.

      Instead of group-think political prescription, Whole Foods again showed (by stable premiums for 4 years with HSAs), how self-managed care is better and thriftier. Arrogant officials rationalize their pay and power.

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