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Health Affairs Article Shows Wide Variations In Treatment Of Chronically Ill Medicare Beneficiaries In California

Medicare Spends More On Care In Los Angeles, But While L.A. Patients Experience More Resource-Intensive Care, The Quality Is No Better


BETHESDA, MD—Medicare spent far more in the last two years of life for enrollees treated in Los Angeles hospitals than it did in Sacramento hospitals, which indicates the presence of vast variations in how providers in the two metropolitan areas treat patients, according to a new article posted today on the Health Affairs Web site.

John E. Wennberg and colleagues examined claims data for chronically ill Medicare beneficiaries in California who died during 1999-2003, to develop a picture of health care resource utilization patterns in California hospitals. The research was supported by the California HealthCare Foundation and the Robert Wood Johnson Foundation.

LA hospitals on average received 69 percent more per Medicare patient treated in the last two years of life than did Sacramento hospitals, which the authors used as the state’s benchmark for spending. Medicare could have saved $1.7 billion had the per person spending been the same in LA as in Sacramento over the study period.

The Los Angeles patients spent more days in the hospital and the intensive care unit, saw doctors more often, and were referred to specialists more often. However, the additional care provided in some regions and hospitals did not improve medical outcomes or patient satisfaction; in fact, as the volume of care increased, the quality of care and patient satisfaction declined.

Medicare also spent more in San Francisco and San Diego than in Sacramento for that same population of patients. Average spending per patient varied by a factor of four among hospitals in the state, Wennberg says.

Within systems, there also were considerable variations in care, the authors write. Within the University of California (UC) hospital system, for example, Medicare spending and other utilization measures varied widely, with UCLA treating chronically ill Medicare beneficiaries aggressively and receiving more Medicare payment as a result.

“Chronically ill Americans need a fundamental redesign of care, shifting resources from the overused acute care sector to the now underfunded infrastructures of care for the management of patient populations,” Wennberg says.

“But achieving a major redesign requires new economic arrangements that pay for performance that actually, demonstrably, improves systemwide efficiency—that reward, rather than penalize, provider organizations that successfully reduce overreliance on acute hospital care and develop population-based strategies for managing their patients with chronic illnesses,” he says.

Wennberg’s coauthors are Elliott S. Fisher, senior associate at the Veterans Affairs Outcomes Group in White River Junction, Vermont, and a professor at Dartmouth Medical School; Laurence C. Baker, an associate professor of health services research and policy at Stanford University School of Medicine; and Sandra Sharp and Kristen Bronner, research associates at Dartmouth Medical School.

Accompanying the paper are Perspectives by Sen. Max Baucus (D-MT); Thomas Priselac, president and chief executive officer of Cedars-Sinai Health System in Los Angeles; Uwe Reinhardt, James Madison Professor of Political Economy at Princeton University; Leonard Schaeffer, chairman of WellPoint, and Dana McMurtry, WellPoint’s vice president for public policy; and Barry Straube, acting director of the Office of Clinical Standards and Quality and acting chief medical officer of the Centers for Medicare and Medicaid Services (CMS).

Wennberg and colleagues’ article and the six Perspectives can be read at http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.526/DC3.

Health Affairs , published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org. The full text of each Health Affairs Web Exclusive is available free of charge to all Web site visitors for a two-week period following posting, after which it will switch to pay-per-view for nonsubscribers. The abstracts of all articles are free in perpetuity. Web Exclusives are supported in part by a grant from the Commonwealth Fund.


©2005 Project HOPE–The People-to-People Health Foundation, Inc.