Orszag Emphasizes Waste
Former director of the Office of Management and Budget, Peter Orszag, has weighed in on the recent Institute of Medicine report (find my blog entry about that: http://www.utahhealthcareinitiative.com/blog/how-save-30-american-health...) in a column appearing in a recent edition of Bloomberg.com (http://www.bloomberg.com/news/2012-09-11/how-much-savings-is-left-in-u-s...). Excerpts:
Last week, two important reports underscored the potential for improving the value of health care in the U.S.
The first of these, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” issued by the Institute of Medicine, highlights two crucial facts. The first is that the health system provides a great volume of care that doesn’t help patients. . .Second, medicine is becoming so complex that it is virtually impossible for an individual doctor to keep pace -- especially without help from computers, the institute says.
The second important health-care report last week, published in Health Affairs, is based on a comparison of health- care costs and quality among various regions. . .The private-insurance data also show tremendous variation. For common chronic conditions, for example, the least-expensive costs per medical episode (those at the 10th percentile of all episodes) were about one fifth to one third less than the median, while the most expensive costs per episode (at the 90th percentile) were three to five times the median. In other words, the highest costs are more than 10 times the lowest -- for treating the same condition. The team also found significant variation both within and across regions.
This variation might be understandable if the higher spending bought better results. However, according to the researchers, “for the conditions that we analyzed, we found essentially no correlation between average costs and the measured level of care quality across markets.”
The evidence thus suggests that in both Medicare and in private-insurance markets, higher costs are not associated with better quality. That underscores the opportunity identified by the Institute of Medicine: By reducing the very high costs that are not generating better quality, the U.S. could reduce total spending without diminishing the quality of care people receive.
The only pathway to a better health care system is through improved quality. Better quality care costs less. We can not finance health care for all Americans unless we achieve a higher quality health care system. But in order to achieve higher quality, we must agree to stop demanding inappropriate care. Some of this inappropriate care is done by way of defensive medicine. And some is delivered when families of critically ill patients are simply unwilling to recognize when allowing their loved one to die is the best option. But most of the inappropriate care is delivered when the patient simply does not know better and the doctor is trying, without the backing of clinical science, to respond to intractable symptoms. We need a societal mechanism for discontinuing payments for inappropriate care.
Dr. Joe Jarvis