When it comes to health care, the citizens of Iowa and New Hampshire are different from you and me: they enjoy higher quality yet much more affordable health care than citizens in virtually any other state. This may help explain why health care just hasn’t seemed to be a pivotal issue in these early primaries.
The chart below (click the image for a bigger version in a new window), published in Health Affairs in 2004, rates the quality of health care state by state (see vertical axis) while also revealing how much Medicare spends, on average, per beneficiary in each of the states each year. (See horizontal axis.) Spending has been adjusted to take into account inflation, differences in prices in different states, and differences in the age, sex and race of the Medicare population in each state. States that spend most appear on the far right of the chart. States that provide the highest quality health care are clustered at the top.
What is startling is how many of the states that spend less than
$5,500 per beneficiary annually are ranked in the top fifth for quality
(between 1 and 11 on the vertical axis). This group, which appears in
the upper left portion of the chart, includes New Hampshire and
Iowa–as well as Vermont, Maine, North Dakota, Utah, Wisconsin and
Minnesota. In these states, higher quality and lower cost go hand in
hand. What do these states have in common? These areas boast fewer
specialists, and so patients are much more likely to get their care
from family doctors and internists.
At the other end of the spectrum, clustered in the bottom right
corner of the chart, you find high-spending states like Mississippi,
Texas, Louisiana, Oklahoma, California, New Jersey and Florida that
rank in the bottom fifth in terms of quality, while laying out $7,000
to $8,000 per beneficiary. In the middle of the chart, toward the
right, New York and Maryland pop up, spending well over $7,000 per
beneficiary while delivering care that is only mediocre.
How did the researchers judge quality? There is no perfect measure.
In this case they used 24 yardsticks of effective care developed by the
Medicare Quality Improvement Organization. The list focuses on
treatments for which there is strong scientific evidence and
professional consensus: for instance, everyone agrees on the importance
of giving antibiotics to a patient suffering from bacterial pneumonia
within eight hours of admission and giving beta-blockers to heart
attack victims within 24 hours. In the states with the highest scores,
hospitals met these 24 targets time and again.
Many researchers would argue that rather than measuring “process”
(whether health care providers do certain things) one might better look
out “outcomes” (how the patients fared in the end.)
But other studies that measure quality in different ways confirm
what this chart reveals: in regions where there are more specialists,
the cost of health care is higher and patients receive more aggressive
care, but outcomes are no better—and often they are worse.
Meanwhile, in areas like New Hampshire and Iowa, where patients see
fewer specialists, they seem to be getting more preventive care—and
better coordinated care—from their family doctor.
Returning to the primaries: it’s very likely that health care is
not a hot topic in these early run-offs because it is not a huge
problem in these states where health care is relatively affordable. As
a result, as Merrill Goozner points out:
“In Iowa, fully 88 percent of the adult population has health
insurance, compared to a national average of 82 percent. In New
Hampshire, the number is 86 percent. Moreover, both states [have done]
extremely well in quality measures such as delivering preventive care
and treating adult diabetics. And both states had below average costs
for Medicare enrollees, fully 20 percent below the national average in
Iowa’s case.”
As the primaries move on to states like South Carolina, New York,
California, New Jersey, Georgia, and Massachusetts will the health care
debate become more important? How will that affect the votes?
We’ll have to wait and see.
The states that score well on quality, I suspect, also probably have a lower percentage of their population living in poverty. The absence of large cities in a number of those states also means there is no very poor urban underclass, nor is there much of the grinding rural poverty that you often find in Appalachia or the Deep South. Regional differences in diet are probably also a factor in health outcomes and Medicare spending – worse in the South and much better than average in Hawaii. I don’t think a surplus of hospital beds and medical specialists have much to do with well above average Medicare spending in MS, AR, GA, OK or TX. Conversely, MA, NJ, NY, CA and FL do have a large supply of specialists and more than their share of expensive to operate Academic Medical Centers which undoubtedly contribute to high healthcare costs in those states. Bottom line: it’s a darn complicated issue.
Barry–
Actually, the data is adjusted in light of the underlying health of the total population. You’re eright– in states where there is more poverty the underlying health of the population is lower–but that is factored in.
And if you read the dartmouth reserach (at http://www.dartmouthatlas.org) you will find that there is, in fact, a surplus of specialists and hospital beds in Louisiana, Texas etc.
This reserach has been going on for three decades and is extraordinarily well-documented. They’ve counted the specialists, they’ve counted the hospital beds, and the results are always the same: supply drives utlilization. (In some areas of the south, there may be more hospital beds and specialists because for-profit hospitals have expanded and tend to pay specialists bonsues (in the form of offices, etc.) to come to the area and refer patients to these hospitals.
As for what people eat in these states– I was in New Hampshire last week, and its largest city (Manchester) is very poor.
It’s also pretty difficult to find good, healthy food!
Maggie,
I have no doubt that, as the Dartmouth data shows, there is a high correlation between markets with large numbers of specialists and hospital beds and markets with well above average utilization of healthcare services. I’m not sure, however, that we know how to stop it.
For example, suppose, say, UCLA Medical Center bought up all the practices of the specialists who account for most of the hospital’s referrals and then put all the specialists on salary. I suspect that UCLA would remain extremely interested in the doctors’ ability to produce revenue for the hospital system under fee for service reimbursement. Hospital management would probably track physician revenue “productivity” closely and would likely tie at least a piece of their compensation to meeting revenue generation metrics.
In theory, the answer to this should be global capitation. The problem is that even very large hospitals and/or physician group practices cannot predict the cost of serving patients a year in advance with enough accuracy to live within a global budget without rationing. At least the physician practice knows how many patients it has at any given time. A hospital, by contrast, has no idea how many patients will access its ER or how many of those might need inpatient or future outpatient services. Large insurers like United and Wellpoint can predict their medical cost trend within 50 basis points, but they are doing it for a combined membership of over 60 million people.
Under the circumstances, I think it would be helpful if doctors were placed in tiers (like drugs) but based on the quality and cost-effectiveness of their practice pattern. Patient cost sharing would vary depending on the tier. It is conceivable that every specialist in a high utilization area like Los Angeles could wind up in the highest tier (least cost-effective) which could generate some push back from patients wanting to know why that is the case.