What is supply-sensitive care? Basically, it means if you build it, they will come. With respect to health care, it means that available capacity, whether it is appointment times with your internist or available hospital beds, will be utilized. Why is this important? Because it contributes greatly to increasing health care costs. Rather than providing medical care based on scientific evidence, medical care is provided based on the availability of personnel, beds, and equipment. Interestingly, medical text books do not present clinical guidelines based on scientific evidence, that is well-controlled studies that demonstrate the effectiveness of treatment. With little guidance on appropriate treatment, the system is simply used to its maximum capacity. Milton Roemer noted the relationship between capacity and use in the early 1960s. This relationship is known as Roemer’s Law.
Dr. John Wennberg of the Dartmouth Atlas Project (DAP) has shown consistent correlations between capacity and usage. For example, when he looked at hospitalization rates for medical (non-surgical) conditions, he found that more than half of the variations in hospitalization rates could be explained by hospital bed capacity, not medical condition.
DAP presents other examples. In the case, of visits to cardiologists, about half of the variation in the number of visits per Medicare enrollee could be explained by the number of cardiologists practicing per 100,000 residents. There is a similar relationship with respect to visits to internists. In both cases, the number of visits is not related to health status but availability of medical personnel.
Does extra care result in better outcomes? Apparently not. In fact, more care may result in poorer rather than better results! Dr. Elliott Fisher and colleagues studied patient outcomes for persons who had a hip fracture, heart attack, and colon cancer. They followed patients for a period of five years and found that mortality rates were greater in those regions providing greater intensity of care. They also found that patients receiving more care actually rated the quality of care lower than patients in regions with lower-intensity care.
What can be done to ensure that appropriate, high quality care is provided? Accurate information on the effectiveness of care can go a long way towards ensuring appropriate care. Patients with access to information on the quality and effectiveness of care will select better practitioners. Roemer’s Law, however, ensures available capacity will still be used. How can excess resources be managed? Thirty-seven states require hospitals wishing to expand or purchase new equipment apply for a certificate of need through the state they are located in. This requirement should exist in all states.
DAP further recommends that Medicare should:
1. Direct resources away from acute care towards better coordinated and integrated care outside of hospitals. A greater emphasis should be placed on home health and hospice care rather than hospitalization.
2. Pay for performance instead of number of visits, tests, and procedures. Providers who successfully manage care for chronic illness using fewer resources should be rewarded.
The potential for savings in health care is great. The Dartmouth Atlas Project (DAP) notes that Medicare spending per person varies by as much as three-fold. More specifically, DAP examined Medicare spending at 226 of the largest hospitals in California over a five year period (1999-2003). They found that spending per patient during the last two years of life ranged from $24,722 to $106,254. They estimate that Medicare could save $1.7 billion in the Los Angeles area alone. They note that days of hospital treatment for persons during the last few months of life vary between six and 20 days–more than a threefold difference.
If better outcomes can be achieved with the use of fewer resources, perhaps rationing isn’t such a bad thing after all.
You can find the complete DAP report at http://www.dartmouthatlas.org/topics/supply_sensitive.pdf.
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That’s great. Thank you for commenting!
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