At the Massachusetts Medical Society’s 8th Annual Leadership Forum last Wednesday, Dr. Steven Schroeder, former head of the Robert Wood Johnson Foundation
and Distinguished Professor of Health and Health Care at the University
of California, San Francisco, told a provocative story about a poll
that asked patients in the U.S. `Canada, Australia, New Zealand and
the U.K the following question:
“If your personal doctor told you that you had an incurable and fatal
disease, would you accept that diagnosis or seek a second opinion?
- In the U.S. 91 percent of patients said they would seek a second opinion.
- In Canada 80 percent “ “ “ “ “ “ “
- In Australia 71 percent “ “
- In New Zealand 51 percent
- In the U.K. 28 percent
“You have to love the British,” Schroeder commented. “You can just hear
an Englishman saying ‘Well, Luv, it’s been a good life, hasn’t it? Now
let’s make a pot of tea and discuss the funeral arrangements.”
At the other end of the spectrum, we find the Americans who, Schroeder
noted, “are the only people in the world who expect to live ‘in
Today, I would like to suggest that our expectations as patients help
to explain why we spend roughly twice as much per person on health care
as most developed countries—even when, overall, it’s not clear that our
healthcare is better. In fact, in some areas outcomes are worse.
Schroeder listed the factors that drive our health care bills ever higher: as a nation, we consume more care than the citizens of other countries while also paying more for virtually everything from devices to specialists. We don’t spend more days in the hospital—in fact, our hospital stays are usually shorter—but more happens to us while we’re there. We use more cutting edge medical technology.
U.S. patients also undergo more procedures. Just one example: in the U.S. 388 out of every 100,000 people has a coronary angioplasty procedure, compared to 166 out of 100,000 in Germany, 81 out of 100,000 in Canada and 51 out of 100,000 in England. Now, we may have more heart disease than some countries—but not that much more. (In fact, given the fact that many European still smoke, and not a few drink wine as if it were water, we might expect the rate of heart disease to be higher there.) Meanwhile, research shows that, even as we open more cardiac centers and do more angioplasties we have seen little improvement in the percentage of patients who survive heart attacks since 1996. Yet spending in this area continues to spiral. Clearly we have reached a point of diminishing returns.
The U.S. also has more intensive-care beds than other countries, Schroeder noted—which led to another story. He described how surprised he was when he first visited intensive-care units in Europe. “There weren’t nearly as many beds—and the ‘train wrecks’ weren’t there,” he said, referring to patients who are so seriously damaged by disease or accident that it seems extremely unlikely that they will ever recover.
“I asked ‘Where are the train wrecks?’ Schroeder recalls, “and the students and doctors looked down at their shoes. Finally, someone spoke up, said he had trained in the U.S., and admired so much about U.S. medicine, but he said, “You don’t know when to stop.”
Part of the problem may be that American consumers want and expect more health care. We just won’t accept our own mortality: we expect medicine to save us. Indeed some, like medical ethicist Daniel Callahan, have suggested that our high-tech, high-profit health care industry is “in the business of selling dreams.”
But few seriously ill patients call out for the opportunity to spend their dying days in an ICU. Most would prefer to die at home. True, their relatives may well urge the ICU nurse and doctor to “do everything possible,” but that doesn’t explain why so many U.S. patients land in an ICU.
Research suggests that some Americans spend more time in ICUs than patients in other parts of the world, in large part because we have more ICU beds. In other words, supply drives demand. And what is true of the U.S. as a whole is true of Massachusetts, in spades.
Just as the U.S. spends more per person on healthcare than any other country in the world, healthcare expenditures in Massachusetts surpass spending in every other state. And this, I propose, is why Massachusetts is having such a hard time implementing its new healthcare reform law.
On Friday I wrote about the problems that the Massachusetts plan is facing. In an effort to achieve universal coverage, Massachusetts has mandated that everyone in the state must purchase health insurance; those who earn less than 300% of the poverty level will receive a full or partial subsidy from the state to cover the cost of premiums. Those who are receiving a subsidy have responded enthusiastically, and are signing up. But people who don’t qualify for the subsidy are refusing to buy health insurance. They would rather pay the fine. Thus, of the 228,000 uninsured citizens that the state hoped would sign up for insurance, just 15,000 have enrolled. Many say that the insurance is just too costly.
Today let me suggest why insurance is so expensive in Massachusetts. It’s not because the insurance industry is profiteering in Massachusetts—or at least, that is not the major problem. Unlike most states, Massachusetts is blessed with a large number of non-profit insurers, and by and large, the state’s reformers say, insurers in the state made a good faith effort to design affordable policies for the program.
Insurance is expensive in Massachusetts because its citizens consume more healthcare than people in many other states. They undergo more tests and procedures than most of us, and they see more specialists. Look at a graph of average healthcare expenditures per person in Massachusetts compared to average healthcare expenditures in the rest of the U.S., and you find that in Massachusetts, individuals receive an average of nearly $10,000 worth of care each year—compared to just a little over $7,000 per capita nationwide
Do the citizens of Massachusetts expect more care than Americans in other states? Probably—after all, that is what they are used to. If they didn’t receive extremely intensive aggressive care, they might think something was amiss. Doesn’t the doctor like me? Doesn’t he care?
But the underlying reason people in Massachusetts have become accustomed to such lavish care is not that they are naturally more demanding than people in other states. Rather, high consumption of care is driven by the fact that the state is a medical Mecca, crowded with academic medical centers, specialists and the equipment needed to perform any test the human mind is capable of inventing.
How can I speak with such confidence about what drives health care inflation in Massachusetts? Because over the past three decades, researchers at Dartmouth University have been analyzing Medicare records in various parts of the country, and found that Medicare spends twice as much per person in some areas than in others. And researchers have discovered a direct correlation between how many specialists and hospitals beds are available in the region and how much Medicare spends. Build the beds, and they will be filled. (I have written about the Dartmouth research here)
To understand why it is so hard for Massachusetts to fund universal coverage, begin by looking at Medicare spending in Massachusetts. The records reveal that in the Commonwealth, Medicare spends roughly $7,000 per beneficiary each year—40 percent more than it spends in states like New Hampshire, Utah, Oregon, Montana, South Dakota or New Mexico, and 16% to 25% more than it shells out, per senior, in Vermont, Maine, Wisconsin, Virginia, Colorado, North Carolina, South Carolina, Ohio, Iowa or Minnesota.
Is this because seniors in Massachusetts are sicker than people in Iowa or Minnesota? Is it because Massachusetts doctors charge more? No. The researchers adjusted for differences in local prices, race, age and the overall health of the population in each region.
Yet the quality of care is no better in the states where Medicare spends most, according to a 2004 study published in Health Affairs. Frequently, it is worse. According to the study, quality (measured by using 24 yardsticks of effective care developed by the Medicare Quality Improvement Program) appears highest in Northern New England states (New Hampshire, Vermont, Maine) and Northwestern states (including North Dakota, Wisconsin and Minnesota) where Medicare spends only about $5,000 per patient each year.
Researchers have concluded that this is because so much of the healthcare consumed in high-spending regions is unnecessary. This is care driven, not by medical need, but by supply. By definition, overtreatment exposes the patient to more risks than benefits—or as Dr. Elliot Fisher, one of the Dartmouth researchers, puts it, “Hospitals can be dangerous places, especially if you don’t need to be there.”
Now consider supply in Massachusetts. It turns out that the Commonwealth has one doctor for every 267 citizens of the state—versus one doctor for every 425 people in the nation as a whole. Meanwhile, the state has a critical shortage of primary care physicians—and an abundance of specialists.
Thus, there are more specialists available to see patients—and they do. During their last six months of life, slightly more than a third of Massachusetts’s patients see 10 or more specialists. By contrast, in Maine, Vermont and Oregon fewer than 20 percent of patients are attended by a bevy of specialists.
Massachusetts also has an abundance of hospital beds—enough to allow patients to spend an average of 11.8 days in the hospital during their last six months of life—compared to 9.5 days in Maine. None of this is consciously planned. It’s just that if the beds are available, it’s easier to hospitalize the patient. And once they are in the hospital, it’s easy to refer them to a dozen specialists, assuming that enough specialists are available.
In my next post, I’ll talk about my own speech at the Massachusetts Medical Society’s Forum, and why I held out hope that it will be possible to finance universal coverage nationwide—even if Massachusetts was a tough place to begin the experiment.