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Medicare
Almost One-Third of Medicare Spending for
Chronically Ill Seniors is Unnecessary
Study sees need
of major overhaul in managing
chronic illness of elderly
May 16, 2006 - Staggering variations in how
hospitals care for chronically ill elderly patients indicate serious
problems with quality of care and point toward unnecessary spending by
Medicare. Lower utilization of acute care hospitals and physician visits
could actually lead to better results for patients and prolong the
solvency of the Medicare program, according to a new study by the Center
for the Evaluative Clinical Sciences (CECS) at Dartmouth Medical School.
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The study calls for overhauling how the nation
manages chronic illness, and proposes that hospitals take leadership in
redesigning how they care for the chronically ill.
Three issues drive the differences in the cost and
quality of care, according to principal investigator John E. Wennberg,
M.D., M.P.H.
"Variation is the result of an unmanaged supply of
resources, limited evidence about what kind of care really contributes
to the health and longevity of the chronically ill, and falsely
optimistic assumptions about the benefits of more aggressive treatment
of people who are severely ill with medical conditions that must be
managed but can't be cured," said Wennberg.
The Dartmouth Atlas Project studied the records of
4.7 million Medicare enrollees who died from 2000 to 2003 and had at
least one of 12 chronic illnesses. The study demonstrates that even
within this limited patient population, Medicare could have realized
substantial savings - $40 billion or nearly one third of what it spent
for their care over the four years - if all U.S. hospitals practiced at
the high-quality/low-cost standard set by the Salt Lake City region.
The report comes on the heels of a report by
Medicare's trustees that the insurance program will exhaust its trust
fund in 2018, two years earlier than previously forecast.
The new research is based on Medicare claims data
for more than 4,300 hospitals in 306 regions, released today in a new
database available at www.dartmouthatlas.org. For the first time, those
who use, provide, pay for and make policy about America's health care
system will be able to compare the efficiency of states, regions and
their individual hospitals and associated physicians in treating
patients with chronic illness. The new interactive database was funded
by the Robert Wood Johnson Foundation, the long-time principal
underwriter of the Dartmouth Atlas Project.
A fundamental problem, and one that contributes to
both overspending and worse outcomes, is that most acute care hospitals
have become first-line providers of services to chronically ill elderly
people, whose care would be better managed, safer and less expensive
outside the hospital setting, according to the Dartmouth Atlas Project.
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Medicare
Spending on Beneficiaries With Chronic Illnesses Varies by
State, Hospital, Report Says |
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May 16, 2006 -
Medicare spends tens of thousands of dollars more in some states
than in others to provide care for beneficiaries with chronic
illnesses, but the increased spending does not result in longer
life for beneficiaries or higher satisfaction with their quality
of care, according to the study released on today by the
Dartmouth Atlas Project,
USA Today reports.
For the study,
Dartmouth Medical School researchers examined records of
hospital care, tests and physician visits provided to 4.7
million Medicare beneficiaries during the last two years of
their lives.
Study participants
were ages 67 and older and had at least one of 12 chronic
illnesses (Appleby, USA Today, 5/16). Study participants died
between 2000 and 2003 (Feldstein,
St. Louis Post Dispatch, 5/16).
According to the
study, Medicare spent the most on average -- $39,810 -- to
provide care for participants in New Jersey, followed by the
District of Columbia, California and New York. Medicare spent
the least on average -- $23,697 -- to provide care for
participants in Idaho, followed by Iowa, West Virginia and North
Dakota, the study finds (USA Today, 5/16).
Participants in
New Jersey had the highest average number of physician visits
during the last six months of their lives at 41.5, and those in
Utah had the lowest average number at 17, according to the
study. In addition, the study finds that participants in Hawaii
spent the highest average number of days in the hospital during
the last six months of their lives at 16.4 and that those in
Utah spent the lowest average number at 7.3.
For each chronic
illness, the study finds higher mortality rates among
participants who received the most care (Freking,
AP/Long Island Newsday, 5/16).
Differences Among
Academic Hospitals
According to the study, participants during the last six months
of their lives were hospitalized or placed in an intensive care
unit five times more often at some major academic hospitals than
at others, and Medicare spent twice as much to provide care for
participants during the last two years of their lives at some
facilities than at others.
The study finds that
participants at
New York University Medical Center spent the highest average
number of days in the hospital during the last six months of
their lives at 32.1, compared with an average of 12.9 days for
those at
St. Mary's Hospital, a Mayo Clinic facility.
The study also finds
that participants at the
University of California-Los Angeles Medical Center spent an
average of 11.4 days in the intensive care unit during their
last six months of their lives, compared with an average of 3.3
days for those at
UC-San Francisco Medical Center.
In addition, the study
finds that Medicare spent an average of $79,280 to provide care
for participants during the last two years of their lives at
NYUMC, compared with an average $37,271 to provide care for
those at the Mayo Clinic (Winslow, Wall Street Journal, 5/16).
Reaction
Jack Wennberg, principal researcher of the study and director of
the
Center for Evaluative Clinical Services at Dartmouth Medical
School, said, "Things are actually worse in regions that spend
more money and have higher utilization." Wennberg added,
"Patients don't benefit -- they can't be rescued -- and the
costs of such care are very high, both in dollars spent and in
providing care that the majority of chronically ill patients
might not want, such as admissions to intensive care and being
sent to specialist after specialist."
Nancy Chockley,
president of the
National Institute for Health Care Management, said, "I
think this is one of the most important studies to come about
this year. Shame on all of us if we don't act on this."
Peggy O'Kane,
president of the
National Committee for Quality Assurance, said, "The people
who pay the bills need to stand up and say, 'Enough of this,
this is not the way we want to use our health care dollars'"
(St. Louis Post-Dispatch, 5/16).
Helen Darling,
president of the
National Business Group on Health, said that the study "is
evidence that we are wasting hundreds of billions of dollars
that we need to be spending on the people who don't get the care
they need, not on people who don't need the care they're
getting."
Sen. Max Baucus
(D-Mont.) said, "These new findings remind us yet again that we
need to start paying for quality -- not just quantity -- in
Medicare," adding that the program requires a "sensible and
sustainable payment policy for the future" (Carey,
CQ HealthBeat, 5/15).
However, Clay Dunagan,
vice president for quality at
BJC HealthCare, said that the study does not take
"everything into account."
Web Site
Dartmouth on Tuesday plans to release Dartmouth Atlas Project
data on 4,300 U.S. hospitals in 306 regions on the project Web
site,
Dartmouthatlas.org (St. Louis Post-Dispatch, 5/16). Elliott
Fisher, a professor of medicine at Dartmouth, said, "These data
allow patients, purchasers (such as insurers and Medicare) and
policy makers to see what's happening to patients with chronic
illness." Fisher added that differences among hospitals can have
"huge implications for what patients pay in terms of their
copayments" (Wall Street Journal, 5/16).
"Reprinted with
permission from kaisernetwork.org You can view the entire
Kaiser Daily Health Policy Report, search the archives, and sign up
for email delivery at
www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser
Daily Health Policy Report is published for
kaisernetwork.org, a free service of The Henry J. Kaiser Family
Foundation. © 2006 Advisory Board Company and Kaiser Family Foundation.
All rights reserved.
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"The problem of overuse of acute care hospitals and
medical specialists in the management of chronic illness is rapidly
getting worse," said Wennberg.
He points to finding that the resources per capita
allocated to managing chronic illness during the last two years of life
are increasing steadily each year. For example, the nation's health care
providers were using 13.6 percent more ICU beds in 2003 than they did in
2000. Physician labor used to manage chronic illness also increased
substantially: 13.4 percent for medical specialists and 7.7 percent for
primary physicians.
The acceleration was greatest in regions that were
already using the most care, so the gap between high and low rate
regions grew greater over the four years.
The financial incentives used by Medicare and
most other payers encourage the overuse of acute care hospital services
and the proliferation of medical specialists.
The care of people with chronic illness accounts
for more than 75 percent of all U.S. health care expenditures,
indicating that overuse and overspending is not just a Medicare problem
- the health care system as a whole has not developed efficient,
effective ways of caring for people with severe chronic illnesses.
The study paints a picture of the health care
system in disarray over the treatment of chronic illness. There are no
recognized evidence-based guidelines for when to hospitalize, admit to
intensive care, refer to medical specialists or, for most conditions,
when to order diagnostic or imaging tests, for patients at given stages
of a chronic illness. Lacking this, two factors drive decisions:
● Both doctors and patients generally believe
that more services - that is, using every available resource such as
specialists, hospital and ICU beds, diagnostic tests and imaging etc. -
produces better outcomes.
● Based on this assumption, the supply of
resources - not the incidence of illness - drives utilization of the
services. In effect, the supply of hospital beds, ICU beds, and
specialty physicians creates its own demand, so areas with more
resources per capita have higher costs per capita.
There is no better illustration of the lack of
scientific consensus on how to manage chronically ill patients than the
wide variations among academic medical centers.
Among the U.S. News & World Report honor roll
hospitals, the average number of hospitalized days during the last six
months of life ranged from 12.9 days per decedent at St. Mary's Hospital
(the principal hospital of the Mayo Clinic in Rochester, Minnesota) to
23.9 at New York-Presbyterian Hospital.
The University of California at Los Angeles
teaching hospital had the highest average number of days in intensive
care units during the last six months of life (11.4 days per decedent),
a rate 3.5 times higher than the rate for patients treated at the
University of California teaching hospital in San Francisco (3.3 days
per decedent).
Medicare enrollees who were patients of the New
York University Medical Center had an average of 76.2 physician visits
during their last six months of life, almost one-third more than
patients at the next-highest rate academic medical center, the Robert
Wood Johnson University Hospital (57.7 visits per decedent).
Patients of the University of Kentucky Hospital had
slightly more than half as many (18.6) physician visits as the national
average (33.5).
Hospitals that treat patients more intensively and
spent more Medicare dollars did not get better results. Similarly, the
regions with the best quality and outcomes used fewer resources relative
to their high-cost counterparts. Patients in low-cost, high-quality
regions such as Salt Lake City, Utah, Rochester, Minn., and Portland,
Ore., are admitted less frequently to hospitals, spend less time in
intensive care units and see fewer specialists.
"This carries an important implication for health
care policy: Health care organizations serving these low-cost regions
aren't withholding needed care," said co-author Elliott S. Fisher, M.D.,
M.P.H., senior associate at the VA Outcomes Group and professor of
medicine and of community and family medicine at Dartmouth Medical
School.
"On the contrary, they are more efficient. They
achieve equal and often better outcomes with fewer resources. These
organizations offer a benchmark of performance toward which other
systems should strive."
"This report should end the 'more is better'
myth in health care," said Donald M. Berwick, M.D., M.P.P.,
president and CEO of the Institute for Healthcare Improvement (IHI) and
a leading national authority on health care quality and improvement
issues.
"The nation can do a lot to improve the quality and
lower the cost of health care once providers, policymakers, payers and
the public share an understanding that 'more care' is not by any means
always 'better care,' and that new technologies and hospital stays can
sometime harm more than they help."
The researchers studied patients with chronic
illnesses because about 30 to 35 percent of Medicare dollars are spent
on people with these conditions during last two years of their lives.
Two-thirds of those in the study were diagnosed with cancer, congestive
heart failure and/or chronic lung disease.
"The majority of acute care hospitals are applying
their standard forms of 'rescue medicine' to people who are in advanced
stages of diseases that can't be cured," said Wennberg.
"Patients don't benefit - they can't be rescued -
and the costs of such care are very high, both in dollars spent and in
providing care that the majority of chronically-ill patients might not
want, such as admissions to intensive care and being sent to specialist
after specialist."
Using this unique database, researchers compared
every region in the country to three regions that provide
high-quality/low-cost care: Salt Lake City, Utah, served primarily by
Intermountain Healthcare; Rochester, Minn., served largely by the Mayo
Clinic; and Portland, Ore., the largest and most metropolitan region in
a state that has made improvement in end of life care a public policy
goal.
If over the four-year period every region in the
country had used hospitals and physician services in a manner similar to
practice patterns in Salt Lake City, the $123 billion Medicare spent for
these patients would have been reduced by $40 billion, nearly one third.
By the Mayo Clinic benchmark, savings would have been $19 billion. By
the Portland benchmark, savings would have been $38 billion.
"This tells us that we have to fundamentally
re-design the ways we care for the millions of Americans with chronic
illness. We need information like this to ensure that our health care
dollars are spent on high-quality health care that results in better
outcomes for patients," said Risa Lavizzo-Mourey, M.D., M.B.A.,
president and CEO of the Robert Wood Johnson Foundation.
The report speaks clearly to the need to
overhaul the way chronic illness is managed - to redirect resources
away from acute care and invest in an infrastructure that can better
coordinate and integrate care outside of hospitals, for example home
health and hospice care.
A major challenge is to develop reimbursement
policies that provide a path toward transition. When payment is based
solely on utilization, hospitals that reduce stays lose money. The
report calls for reimbursement system that rewards, rather than
penalizes, provider organizations that successfully reduce excessive use
of services and develop broader strategies for managing their patients
with chronic illness.
Extensive research - both across U.S. regions and
among leading academic medical centers - has now documented that greater
use of resources is, if anything, associated with worse outcomes, poorer
quality and lower satisfaction with care. The report emphasizes the need
for academic medical institutions and federal agencies, such as the
National Institutes of Health, to do patient-level studies to produce
detailed evidence defining the efficient clinical practices - for
example, whom to hospitalize, when to schedule a revisit, or when to
refer to a medical specialist, home health agency, or hospice.
About Dartmouth Atlas Project
The Dartmouth Atlas Project (DAP) began in 1993 as a study of health
care markets in the United States, measuring variations in health care
resources and their utilization by both geographic areas. More recently,
the research agenda has expanded to reporting on the resources and
utilization among patients at specific hospitals. DAP research uses very
large claims databases from the Medicare program and other sources to
define where Americans seek care, what kind of care they receive, and to
determine whether increasing investments in health care resources and
their use result in better health outcomes for Americans.
For more information -
http://www.dartmouthatlas.org
The study was funded by the Robert Wood Johnson
Foundation, in partnership with a funding consortium including the
Wellpoint Foundation, the Aetna Foundation, the United Health Foundation
and the California HealthCare Foundation.
About The Robert Wood Johnson Foundation
The Robert Wood Johnson Foundation focuses on the pressing health and
health care issues facing our country. As the nation's largest
philanthropy devoted exclusively to improving the health and health care
of all Americans, the Foundation works with a diverse group of
organizations and individuals to identify solutions and achieve
comprehensive, meaningful, and timely change. For more than 30 years the
Foundation has brought experience, commitment, and a rigorous, balanced
approach to the problems that affect the health and health care of those
it serves. When it comes to helping Americans lead healthier lives and
get the care they need, the Foundation expects to make a difference in
your lifetime. For more information, visit
www.rwjf.org.
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