Sources of Regional Variation in Medicare Part D Spending

New England Journal of Medicine
Donohue J, Morden NE, Gellad WF, Bynum JP, Zhou W, Hanlon JT, Skinner JS

Sources of regional variation in spending for prescription drugs under Medicare Part D are poorly understood, and such variation may reflect differences in health status, use of effective treatments, or selection of branded drugs over lower-cost generics.

Regional Variations in Diagnostic Practices

New England Journal of Medicine
Song Y, Skinner JS, Bynum J, Sutherland J, Wennberg, JE, Fisher ES

Current methods of risk adjustment rely on diagnoses recorded in clinical and administrative records. Differences among providers in diagnostic practices could lead to bias. We used Medicare claims data from 1999 through 2006 to measure trends in diagnostic practices for Medicare beneficiaries. Regions were grouped into five quintiles according to the intensity of hospital and physician services that beneficiaries in the region received. We compared trends with respect to diagnoses, laboratory testing, imaging, and the assignment of Hierarchical Condition Categories (HCCs) among beneficiaries who moved to regions with a higher or lower intensity of practice.

Looking Back, Moving Forward

New England Journal of Medicine
Skinner, JS , Staiger D and Fisher ES

The recent Senate election in Massachusetts may reshape or delay health care reform, but we still face the twin challenges of unsustainable cost increases and uneven quality that plague U.S. health care. Recent controversies have left many people confused about how we might wisely move forward. One such controversy is the debate over the “value index,” a reimbursement approach that would adjust providers’ payments on the basis of regional performance on quality and cost measures. Legitimately concerned that careless implementation of a value index might hurt some preeminent teaching institutions, some leaders of academic medical centers have responded to this proposal by questioning the validity of existing measures of cost performance, many of which have been generated from Medicare data by our Dartmouth research group.

Comparative Effectiveness and Health Care Spending — Implications for Reform

New England Journal of Medicine
Weinstein MC and Skinner JS

Title VIII of the American Recovery and Reinvestment Act of 2009 authorizes the expenditure of $1.1 billion to conduct research comparing “clinical outcomes, effectiveness, and appropriateness of items, services, and procedures that are used to prevent, diagnose, or treat diseases, disorders, and other health conditions.” Federal support of “comparative effectiveness” research has been viewed as a cornerstone in controlling runaway health care costs.

Although cost is not mentioned explicitly in the comparative effectiveness legislation, the American College of Physicians and others have called for cost-effectiveness analysis — assessment of the added improvement in health outcomes relative to cost — to be on the agenda for comparative effectiveness research. This approach has come under harsh criticism from some who view it as the first step in health care rationing by the government — that cost cutting will mean the withdrawal of expensive treatments with small (but still positive) benefits. Some politicians have therefore tried to restrict any efforts to use comparative effectiveness to guide U.S. health care policy.

Getting Past Denial — The High Cost of Health Care in the United States

New England Journal of Medicine
Jason M. Sutherland, Ph.D., Elliott S. Fisher, M.D., M.P.H., and Jonathan S. Skinner, Ph.D.

What seemed to be a golden opportunity to achieve badly needed health care reform now appears to be threatened. Many Americans believe that we simply cannot afford to cover the uninsured, since doing so would require taxes to be raised beyond the level the public can sustain. Others believe that we can slow spending growth only by rationing needed care. Neither option is attractive. Evidence regarding regional variations in spending and growth, however, points to a more hopeful alternative: we should be able to reorganize and improve care to eliminate wasteful and unnecessary services.

Slowing the Growth of Health Care Costs – Lessons from Regional Variation

New England Journal of Medicine
Fisher, ES, Bynum JP, and Skinner JS

The expansion of health insurance coverage in the United States is likely to be on the front burner of health care reform efforts in the new presidential administration. But boiling on the back burner is perhaps the most serious threat to Americans’ access to care: rapid growth in health care costs.

Pessimism abounds. Most observers see rising costs as an inexorable force, blame advancing technology, and conclude that only by rationing beneficial care or making draconian price cuts can we slow the growth of health care costs.

But a careful look at variations in spending growth and spending patterns among U.S. regions reveals a more optimistic picture. By learning from regions that have attained sustainable growth rates and building on successful models of delivery-system and payment-system reform, we might, with adequate physician leadership, manage to “bend the cost curve.”