To restate the obvious, health care costs are spiraling out of control with no real end in sight.  As a result, an enormous cost burden is being put on business owners and consumers.  But what isn’t obvious to most is why this is happening. More importantly, how do we get this under control? We’ve tried high deductible health plans, Health Reimbursement Arrangements (HRA’s), Health Savings Accounts (HSA’s), limited networks, tiered benefit designs and even price transparency.  But none of it is working. Cost increases have not slowed down at all.

Why?  One word – waste.

America outspends all other nations, but it’s 40th in life expectancy and infant mortality.

Of the near $3 trillion that Americans spend on health care annually, 30% is wasted on unnecessary care with poor or ineffective outcomes.

Some factors are regional.  The Dartmouth Atlas of Health Care uses Medicare data to track the amount of geographic treatment variation identified by studying Medicare intensity levels by geographic region. Some regions routinely provide more care to residents while others routinely provide less.  Why?  Many factors contribute to this, including comfort level, expertise, experience, preference and common practice in a given region.  The Dartmouth researchers added up all the differences and concluded that the variation equaled about 1/3 of all medical spending.

With our total healthcare expenditures approaching $3 trillion annually, this ‘1/3’ estimate accounts for about $700 billion annually and perhaps as much as $900 billion. Aetna claims the actual amount is at least $765 billion.

Another problem lies in how many medical decisions are made. Even when evidence exists as to outcomes, surgery rates can vary dramatically from place to place. This is the case in early stage breast cancer. Studies show that mastectomy and lumpectomy achieve similar long-term survival, but women generally differ sharply in their attitudes toward these treatments. Yet in an early Dartmouth Atlas study, we found regions in which virtually no Medicare women underwent lumpectomy, while in another, nearly half did. We see dramatic variations in rates of surgical treatment for other conditions as well.

Such extreme variation arises because patients commonly leave decision-making to physicians.  Yet studies show that when patients are fully informed about their options, they often choose very differently from their physicians.

EXAMPLE

According to the American Cancer Society Connecticut women are about 50% more likely to have mastectomies than Massachusetts women.

This raises the question: are Connecticut women sicker than Massachusetts women? Do they get breast cancer 50% more frequently?  The answer is no, according to breast cancer incidence rate data from the American Cancer Society. The breast cancer rates are virtually identical.

Now, if women in both states were equally sick but received different treatments, did Connecticut women benefit from the additional mastectomies?  Again the answer is no. Breast cancer mortality rates are almost identical in both states.

Not only was the treatment no more effective, but we also run the risk of doing harm when exposing a patient to unnecessary aggressive care.

WHY DO PHYSICIANS USE INEFFECTIVE OR HARMFUL TREATMENTS?

The main reason why these ineffective or harmful practices continue according to Dr. Prasad: They all sound good if you talk about the mechanisms, the nut and bolts, what does it do, how does it work.

However, high quality comparative studies show that many of these practices did not improve patient health. ‘They weren’t just practices that once worked, and have now been improved upon; rather, they never worked. They were instituted in error, never helped patients’ according to Dr. Prasad. He suggests that patients focus their attention on medical care outcomes, not on care mechanisms. The real question, he suggests, is: Does it work?

Patients have medical care options about 85% of the time.  Outcomes are often the same though the treatment processes – and costs – can differ widely. John Wennberg, founder of the Dartmouth Atlas of Healthcare and generally regarded as the most important medical researcher of the past 25 years, suggests that 85% of all medical care allows for a choice of treatments:

• Surgery or physical therapy
• Surgery or medication
• More aggressive or less aggressive care
• Bigger or smaller surgical procedures, and many more.

This is where education must take place.  Patients are fairly savy with the use of their health plan, but they need to be educated with regard to their medical care and available treatment options.  Patients need to be focused on outcomes and ask their doctors the right questions in order to come to an agreed upon treatment plan.  Patients should be asking:

• Out of 100 people like me, how many benefit from this treatment?
• Out of 100 people like me, how many are harmed from this treatment?
• Is there an alternative treatment with similar outcomes?
• Would most doctors make the same recommendation?
• Might some doctors recommend something different?
• How many patients like me to do you treat annually?

When patients begin asking physicians questions like this, wasted and unnecessary care will be reduced.  But most importantly, more correct care and better outcomes will be delivered.