Most discussions of regional variations in healthcare focus on the nation’s cities. Below, a first-of-its-kind map from a post on the Daily Yonder titled “The Uneven Cost of Rural Health Care.”
Daily Yonder/Dartmouth Health Atlas
The map and the post are based on data collected by researchers at the Dartmouth Medical School. Doctors and economists there take a sample of Medicare costs from some 1,843 hospital service areas where a majority of the people are living in rural or exurban zip codes.
The green areas on the map denote hospital service areas that spent below the nation of average of $8,176 per patient (averaged from 2004 to 2006) for Medicare patients. The brown areas spent above the national average. The white areas represent urban hospital service areas, and in a few cases, areas with no data.
When comparing rural areas, the researchers used data that is adjusted for differences in race, sex and age. (It is important to recognize that “the Dartmouth research” includes years of studies. Different studies analyze the data in different ways. When comparing medical centers, Dartmouth researchers have adjusted for differences in the patients’ income and local prices as well.) There are, of course, many variables to consider: “Research has shown that some of the variation is due to differences in the prices paid for similar services, and some is due to differences in illness,” Dartmouth’s researchers acknowledge, “but even after accounting for these factors, twofold differences remain.”
What is remarkable is that, despite the many different ways that the Dartmouth teams have sliced into the data, the conclusion is always the same. They find widespread variations in how very similar patients are treated that have little to do with medical needs—or the patients’ preferences. High-cost regions remain high-cost regions even if there is a large turnover in the population shifts –for example, after the closing of a military base.
And here is what is most interesting: “the differences in spending are almost entirely explained by differences in the volume of health care services received by similar patients.” In other words, we’re not talking about variations in prices, but differences in how much care patients receive. In high-cost areas, patients receive more intensive, aggressive care. They see more specialists, and undergo more tests and treatments. Yet outcomes are no better. Sometimes they are worse.
Some have suggested that the work done by Dartmouth researchers targets the nation’s “big cities” by painting urban areas as more wasteful when dispensing care. But “this map illustrates that variation in health care spending is not just about big city versus rural areas,” Dartmouth College economist Jonathan Skinner told The Daily Yonder. As Skinner notes the map reveals that “even within rural there is a large variation in costs.” (I would add that while the study of how academic medical centers (AMCs) manage chronic diseases in the 2008 Dartmouth Atlas shows that some big-city hospitals provide more aggressive and expensive care, it also reveals that other urban medical centers–such as the Cleveland Clinic, Mass General and Yale-New Haven –practice a more conservative style of medicine. Care is both less intensive, and less costly. So this is not a story of New Hampshire researchers failing to understand the problems that urban hospitals face.)
Meanwhile, this new map shows that the differences among rural areas are as great as the cost variations from one metro region to another. Moreover, the high cost rural service areas are generally in the same places where there were cities with high Medicare costs. This suggests that that the medical culture of an area influences how doctors practice medicine.
In the June 1 New Yorker, for example, Dr. Atul Gawande wrote about the high charges for Medicare patients around McAllen, Texas, where he found a “money culture” driving medical spending skyward. “Medicare costs in the rural regions of far South Texas are among the highest cost in the nation,” Daily Yonder reports. Meanwhile, “Louisiana has the highest costs statewide; and six of the ten most costly rural hospital service areas are in Louisiana.”
Maybe patients in Louisiana are simply sicker? “Places with sicker patients do spend more,” Skinner writes in the September 9th issue of The New England Journal of Medicine. “But that discrepancy accounts for only 18% of the total difference between the highest and lowest cost regions.” Skinner calculates that 70% of the difference between high and low-cost areas is due to “discretionary decisions by physicians.” Doctors in some areas simply order more tests and hospitalize more patients.
The evidence suggests that excess capacity can lead to more aggressive care. For instance, when I was writing Money-Driven Medicine, I learned that the supply of hospital beds per capita is higher in Louisiana than in many other places. And if the beds are there, physicians tend to use them. Skinner offers a further explanation: “ I wouldn’t be surprised if in some high cost areas you had high numbers of physician-owned hospitals,” he told the Daily Yonder referring to specialty hospitals owned by entrepreneurial doctors.
Sure enough, with just a little Googling I discovered a recent article in Louisiana’s the advocate.com, noting that “Louisiana, with 23 physician-owned hospitals already built or planned, is second only to Texas in specialty hospitals. Baton Rouge has three of the hospitals: Greater Baton Rouge Surgical Hospital, The NeuroMedical Center Surgical Hospital and Surgical Specialty Centre.
Critics have long suggested that when physicians own hospitals, they are more likely to send their patients to them for tests and treatments. A study published in Health Affairs, comparing "practice patterns of physician owners before and after they became owners” confirms that rates of use of [magnetic resonance imaging], physical therapy treatments, and [direct medical education] increased significantly” when physicians have a financial interest in a hospital.
Physicians also tend to refer healthier patients to their own clinics, while sending sicker patients to community hospitals. While physician-owned hospitals claim that they provide better care, “peer-reviewed research finds that lower unadjusted mortality rates in cardiac specialty hospitals are largely attributable to the fact that these facilities admit healthier patients,” the Health Affairs study notes. “After adjusting for procedural volume and patient characteristics, mortality rates and outcomes were similar.” Finally, even though the patients are healthier, the Medicare Payment Advisory Commission reports that care at specialty hospitals owned by doctors tends to be more expensive.
The American Hospital Association (AHA) has been a consistent critic “self-referral,” which it says results in over-treating patients and driving up costs. Today, the AHA is applauding health care reformers who hope to include a ban on construction or expansion of hospitals owned by doctors in the final legislation. This may be another way that reform will reduce waste, and rein in spending. Time will tell.
To read the full post on the Daily Yonder, click here .