|Selected research from leading health care experts whose findings have a direct bearing on public policies effecting medical progress. Research is chosen based on its quality and relevance by the Medical Progress Today editorial staff.||
Evaluating the Efficiency of California Providers in Caring for Patients with Chronic Illnesses
This study adds to the wealth of information showing that tax dollars spent on health care are not being spent wisely. Like earlier studies, it shows that there is enormous regional variation in Medicare spending - in this case at the hospital level. Although some hospitals in California are spending much more on patients, there are no clear benefits to show for the additional Medicare outlays.
The study finds significant variation in Medicare spending for chronically ill patients in California. For example…hospitals in Los Angeles received an average of 60 percent more for inpatient reimbursement for Medicare patients during the last two years of life than Sacramento-area hospitals. In fact, Medicare paid some hospitals in the state as much as four times more than other hospitals to care for patients with similar conditions.
Yet the additional care provided did not improve medical outcomes or patient satisfaction. Rather, as the volume of care increased, the quality of care and patient satisfaction actually declined.
The comparisons suggest that savings could be achieved by improving efficiency with no impact on quality. For example, Medicare could have saved $1.7 billion in the Los Angeles area alone if medical practice patterns there, the most expensive region, resembled those of Sacramento, the least expensive.
These problems are endemic to third-party payer systems, because providers have every incentive to bill insurers for unnecessary services. Governments, as in Canada or Great Britain, can try and set price caps on expenditures, but the overall momentum of government spending (up-up-and-away) is impossible to contain.
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