Sense and Nonsense on Health Care Reform

Sun, 22 Mar 2009 19:48:01 +0000

Your Sunday required reading today comes from The Valley News, my local paper, which profiles Dr. Elliott Fisher, one of the driving forces behind The Dartmouth Institute. The early part of the article will give you some sense of how TDI grew up around the Dartmouth Atlas Project. The best quote comes from Fisher about the waste in the health care industry:

“The most important thing about our research, and this really is a case I'm making as often as I can, is that we show where the waste is in medicine,” Fisher said in an interview on Friday. “It's not in the specific treatments that are beneficial. It’s not in the $100,000-a-year drug that offers you even a small potential to survive. The waste is in the physicians in Miami who see their patients for well-controlled blood pressure once a month, when physicians in Oregon are seeing them once a year,” he said.

“The waste is in an unnecessary hospitalization where you could have been cared for at home. The waste is in the unnecessary referrals to specialists and all the testing that goes on with that,” he said.

The article goes on to discuss how important TDI's research has been in policy discussions so far. It mentions how OMB Director Peter Orszag has promoted the research. But it was disappointing to read this nonsense from a different part of the White House:

Last week, Nancy-Ann DeParle, director of the White House Office on Health Reform, said the Dartmouth research on geographic disparities in health care is “part of what is contemplated to be looked at” in reform efforts.

But, DeParle added, “it's very complicated to do that on a national level, because you'd be saying take money away from Miami and give it to Iowa. In Congress, that becomes more complicated.”

“At one level it's just dollars, the other level it's a doctor’s income in Miami versus one in New Hampshire, so it's hard,” said DeParle, who was in Burlington on Tuesday for the second in a series of White House regional forums on health reform.

That's a shocking error. The sensible reforms that come out of the Dartmouth research are to change the way doctors are paid for services based on their use of unnecessary medical procedures. They do not "take money away from Miami and give it to Iowa." They just take the money away from inefficient providers in Miami and give it back to the taxpayers.

There is similarly no level at which "it's a doctor's income in Miami versus one in New Hampshire." The doctor in Miami only loses income if that doctor continues to treat patients inefficiently after the compensation system has changed. The Director of the White House Office on Health Reform ought to be willing to insist that such a doctor loses income. If not, how exactly does health care get less expensive without reducing the quality of care?

The doctor in New Hampshire may or may not gain income -- that depends on whether the new compensation system just reduces payments for inefficient services or whether it goes the extra step of increasing payments for efficient services, even though some doctors were providing services efficiently even without those payments.

Call me crazy, but I expected a better understanding of the issues from the Director of the White House Office on Health Reform, particularly one that has previously served at HCFA and OMB.