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A Painless Way To Hold Down Health Costs?

Slowing the growth of health spending doesn’t have to hurt. That’s the message some health experts are trying to send as Congress struggles to trim back a health sector that’s set to consume a quarter of the nation’s economic output by the year 2025.

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While opponents of the overhaul proposals currently under consideration warn of long waits for care or draconian cuts to payments to doctors and hospitals, there is a third way, says Len Nichols of the New America Foundation. “You can deliver high-quality care for far fewer resources if you organize your processes right,” he says.

The key, says Elliott Fisher, principal investigator for the Dartmouth Atlas of Health Care, is getting doctors and hospitals in the parts of the country that spend the most on medical care now to bring that spending more in line with that of lower-spending regions.

The Dartmouth Atlas has been tracking variations in medical care and spending around the country for two decades, and Fisher says researchers have found two key points. First, it’s clear that patients who live in the lower spending areas do just as well as those where spending is higher. But just as important, more is not always better: Sometimes more spending can lead to worse outcomes.

“Patients in those higher spending communities are twice as likely to have 10 or more different physicians involved in their care,” Fisher says. “And it’s really hard for physicians to maintain effective communication when there are so many more of them involved in a patient’s care.”

By contrast, he says, in lower-spending areas more care tends to be provided by primary care physicians, and patients in those areas are much less likely to spend time in the hospital for care that could be provided elsewhere.

“The high performing systems of this country are much more able to help manage patients as outpatients without having to be hospitalized, without having to be referred to the emergency room,” he says. Doctors in lower-spending areas “are willing to see a patient in the afternoon, start some initial medications, follow them up later in the day to see how they’re doing, and if they’re doing fine, talk to them in the morning and keep them away from that unnecessary hospital stay.”

But the way the government and most insurers pay doctors and hospitals works against the kinds of systems that are more efficient, Fisher says. Doctors don’t get paid for things like making phone calls or sending e-mails. And hospitals lose money if patients don’t come through their doors.

He and other experts want Congress to implement new payment systems that would encourage doctors and hospitals to work together and give them bonuses for keeping patients healthy, and thus using fewer expensive services. “And I think that if we’re thoughtful about creating incentives for organized systems to form – that would allow them to really practice in the ways that physicians came to medicine to do, and the hospital administrators were trained to do – we could get the kind of performance that we want,” he says.

But others are not so sure.

“It would be great if it were true,” says Joe Antos of the American Enterprise Institute, a conservative think tank. “But realistically, we’ve been talking about many of these ideas for a couple of decades now.”

Antos agrees that from an economic point of view, getting doctors and hospitals in the high-spending parts of the country to behave more like those in the low-spending areas would go a long way toward solving the nation’s fiscal problems. “The problem is, we don’t know how to do it,” he says. “What we’re really talking about is changing the way medicine is practiced. And that is not a price issue. That is a cultural issue. That is a cultural issue among providers and a cultural issue among their patients as well.”

And while financial incentives are a good thing, it’s not always clear how well they work. “You need to have some sort of lever. You need to do something, probably to physicians, and to health care providers, to cause some sort of a change in their behavior,” he says.

Still, Antos says Congress should proceed with changes to the payment systems. It just shouldn’t count on the savings coming in the near future. “We absolutely have to work to make some of these ideas happen. But we shouldn’t delude ourselves into thinking that over the next five years or 10 years that there’s going to be a revolution in the way that health care is delivered.”

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Cost and Quality The Health Law