Another Study Challenges Dartmouth

What Medicare spends from one city to the next across the U.S. is one of the thornier and more pressing issues in the national debate over how to slow health spending — and ease pressure on household, employer and public budgets. Previous research, notably by Dartmouth University researchers, has suggested that Medicare spending varies because doctors practice medicine differently (and not always well) across the country, and financial incentives encourage overuse of healthcare.

The latest volley suggests that nearly all communities are a mix of high- and low-cost spending. But communities with the highest overall costs across 10 conditions had a greater prevalence of most of those diseases than the lowest-cost communities. Seniors in high-cost locations were also more likely to have multiple conditions than those in low-cost locales.

Modern Healthcare.

Comments (15)

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  1. Howard says:

    Guess that Dartmouth got it wrong again. Maybe they like to be wrong.

    • Dewaine says:

      Maybe they don’t care or maybe they made a mistake or maybe they were right all along and this new study is wrong or maybe it’s a conspiracy. We’ll have to wait and see what happens the next few times the research carousel goes around.

  2. JD says:

    That is what you would expect…. in any industry but health care. The incentive structures in health care are usually so convoluted that the original study actually made sense. It’s nice to see that there is the possibility that it has a normal-ish market structure.

  3. JD says:

    “Previous research, notably by Dartmouth University researchers, has suggested that Medicare spending varies because doctors practice medicine differently (and not always well) across the country, and financial incentives encourage overuse of healthcare.”

    We need to evade any push for more uniformity and central-coordination that this would certainly create.

    • Milton says:

      I can definitely see how these financial incentives can encourage overuse of healthcare.

      • JD says:

        The predicament is interesting… would we prefer underuse? We need to be wary of any uniform “solution” that forces people into a certain system. Any central standard to resolve this problem is likely to result in an overcorrection and hurt a lot of people.

  4. Samuel says:

    I doubt this new study can really challenge Dartmouth.

  5. Buster says:

    This type of analysis is interesting. But it’s not clear what value it adds. Past analysis supposedly accounted for health status. But patient expectations and physician practice culture undoubtedly impacts expenditures.

    Managed care was supposed to reduce the waste. But it irritated people being told they could not have care — whether unnecessary or necessary. The other side of the coin is provider groups, who try to maximize the care provided against reimbursement formulas.

    Once policy wonks thought the problem was an individual physician, who may order an MRI that was only marginally needed (but would be viewed). Now hospitals will hire analysts to review every medical record and decide who could be admitted to the hospital whether they need to be or not. These guidelines will be created and employee physicians will be forced to provide care based on a cookie cutter approach that has nothing to do with best practices.

  6. Linda Gorman says:

    I have never understood why work restricted to dead people should guide health care policy.

  7. Greg Scandlen says:

    Dartmouth has been wrong for decades. It’s true there are variations in medical practice, but Dartmouth has never offered a plausible explanation. They default to two implausible explanations — 1. Doctors are more greedy in some places than in others. But why should that be? In what way are these doctors different? No answer. 2. It’s all due to the FFS payment system. But the payment system is identical in the various locations, so that can’t possibly be the cause.

    They refuse to consider the most likely explanation — differences in patient demand.

  8. Stephen says:

    Perhaps the higher prevalence of disease in higher spending communities is a result of over diagnosis rather than a sicker population. If so, this finding would tend to confirm the Dartmouth research.

    • Greg Scandlen says:

      Maybe, but what do you suppose would make doctors in one town over-diagnose while doctors in another town do not? Dartmouth has never offered an explanation. Usually Dartmouth defaults to blaming the payment system, but that can’t possibly be true since the payment system is identical everywhere.

      It is far more likely that there are differences in the populations of the two towns than there are differences in the doctors in the two towns.

      • Stephen says:

        The Glover Phenomenon demonstrating wide variation in the incidence of tonsillectomy among Scottish school districts would suggest physician practice patterns rather than differences in population health as the source of the variation in spending.