middle atlantic actuarial club september 17, 2009 baltimore, md shannon brownlee, ms senior research...
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Middle Atlantic Actuarial Club September 17, 2009 Baltimore, MD
Shannon Brownlee, MS
Senior Research Fellow, New America Foundation
Overtreated: Why Too Much Medicine is Making Us Sicker and Poorer
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Source: CBO
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Source: CBO
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MEDICARE
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Source: WHO
POOR VALUE FOR THE $$$
$$$$
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$8,600 – 14,300
$7,800 – 8,600
$7,200 – 7,800
$6,600 – 7,200
$5,280 – 6,600
Not populated
Source: Dartmouth Atlas
$8,600 – 14,300
$7,800 – 8,600
$7,200 – 7,800
$6,600 – 7,200
$5,280 – 6,600
Not populated
Medicare Spending per Beneficiary, 2005
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pioneering research on variation in the delivery of healthcare services
Health Affairs: most influential health policy researcher of the past 25 years
10
John Wennberg, MD, MPH., Founder, Center for Evaluative Clinical Sciences at Dartmouth Medical School
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63%12%
25%
Preference Sensitive Care
Effective Care
Supply Sensitive Care
Source: John E. Wennberg and Dartmouth Atlas
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$8,600 – 14,300
$7,800 – 8,600
$7,200 – 7,800
$6,600 – 7,200
$5,280 – 6,600
Not populated
Source: Dartmouth Atlas
$8,600 – 14,300
$7,800 – 8,600
$7,200 – 7,800
$6,600 – 7,200
$5,280 – 6,600
Not populated
Medicare Spending per Beneficiary, 2005
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Well Bob, it looks like a paper cut, but just to be sure, let’s do lots of tests.
What drives utilization?
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Source: 2006 Dartmouth AtlasNote: Each dot represents Medicare spending in a single hospital referral region.
Relationship Between Prevalence of Severe Chronic Illness and Medicare Parts A and B Reimbursements per Enrollee (2000-01)
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20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Inp
atie
nt s
ec
to
r s
pe
nd
ing
pe
r d
ec
ed
en
t
Source: Dartmouth Atlas
Medicare Spending During Inpatient Hospitalizations per Decedent in the Last Two Years of Life Among Patients with At Least One of Nine Chronic Conditions
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Ask your doctor if taking a pill to solve all your problems is right for you.
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$8,600 – 14,300
$7,800 – 8,600
$7,200 – 7,800
$6,600 – 7,200
$5,280 – 6,600
Not populated
Medicare Spending per Beneficiary, 2005
Source: Dartmouth Atlas
$8,600 – 14,300
$7,800 – 8,600
$7,200 – 7,800
$6,600 – 7,200
$5,280 – 6,600
Not populated
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1. Not defensive medicine -- 15 % of variation
2. Not patient demand3. Not technology arms race4. Local practice patterns5. Local capacity
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The Association Between Hospital Beds per 1,000 Residents (1996) and Discharges per 1,000 Medicare Enrollees (1995-96)
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Hospital- Total FTE physician
labor inputs per 1,000 decedents
Total FTE specialist
labor inputs per
1,000 decedents
Hospital Bed inputs per 1,000 decedents
ICU Bed inputs per
1,000 decedents
Inpatient sector
reimburs-ments per decedent
NEW HAVEN 22 10 74 16 $43,324
BOS-TON 29 12 72 23 $50,156
MAYO 20 9 58 18 $34,371
INTMT. 20 8 46 14 $23,462Source: Dartmouth Atlas
Variation Among Teaching Hospitals in Resource Allocation per Chronically Ill Medicare Decedent in the Last Two Years of Life (2001-2005)
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Does higher utilization and higher spending buy better outcomes?
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1. Lower quality2. More hospitalizations, tests, drugs,
procedures; same volume of elective surgery
3. Worse communication between physicians
4. Lower patient satisfaction5. Worse access to care; longer waiting
times6. Worse coordination of care7. Higher mortality
Source: 2008 Dartmouth Atlas of Chronic Care
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$8,600 – 14,300
$7,800 – 8,600
$7,200 – 7,800
$6,600 – 7,200
$5,280 – 6,600
Not populated
Source: Dartmouth Atlas
$8,600 – 14,300
$7,800 – 8,600
$7,200 – 7,800
$6,600 – 7,200
$5,280 – 6,600
Not populated
Medicare Spending per Beneficiary, 2005
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1. $600-$800 Billion overtreatment
2. 30,000 premature deaths
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Fisher E et al. N Engl J Med 2009;360:849-852
Annual Growth Rates of per Capita Medicare Spending in Five U.S. Hospital-Referral Regions, 1992-2006
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1. $600-$800 Billion overtreatment
2. 30,000 premature deaths
3. Inefficient, expensive markets are getting more so faster
4. Models for greater efficiency – Mayo, Kaiser, Billings, Geisinger
5. Other models – direct medical practice
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1. MEDICARE: penalties, shared savings for organizing (ACO), bundled payments, direct medical practice
2. PRIVATE PAYERS: bundled payments, shared savings, direct medical practice
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WE NEED DATA FROM BOTH MEDICARE AND PRIVATE PAYERS :
1. Utilization per 1,000 population
2. In real time
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THE HEALTH CARE TRAIN WRECK