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Taming Wide Variations in Spending Key to Health Reform - New England Journal of Medicine Commentary from Dartmouth Atlas Project
Date:2/25/2009

Dallas Medicare spending is growing twice as fast as San Diego.

The system rewards physicians for providing care even when it is not needed.

LEBANON, N.H., Feb. 25 /PRNewswire-USNewswire/ -- The cost of providing health care to seniors is rising more than twice as fast in Dallas as in San Diego, and Medicare now spends nearly three times more to care for its enrollees in Miami than it does in Honolulu. This illustrates how huge inefficiencies in the U.S. health care system are hamstringing the nation's ability to expand access to care, according to a new analysis of Medicare spending by researchers of the Dartmouth Atlas Project published today in the New England Journal of Medicine.

Many experts have blamed the growth in spending on advances in medical technology. But the differences in growth rates across regions show that advancing technology is only part of the explanation. Patients in San Diego have access to the same technology as those in Houston, and those in low-cost regions are not deprived of needed care. On the contrary, the researchers note that care is often better in low-cost areas.

The authors argue that the differences in growth are largely due to discretionary decisions by physicians that are influenced by the local availability of hospital beds, imaging centers and other resources - and a payment system that rewards growth and higher utilization.

"To paraphrase a line from the gun control debate: technology doesn't drive the growth in health care spending; people do," said lead-author Dr. Elliott Fisher, principal investigator for the Dartmouth Atlas Project and director of the Center for Health Policy Research at the Dartmouth Institute for Health Policy and Clinical Practice. "The good news is that in many regions, spending is growing relatively slowly. Reformers can learn from these regions and put in place policies that help them sustain what they are
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SOURCE Dartmouth Atlas Project
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