Variations in Health Care Spending

Many agencies and groups have discovered the startling differences that can occur in health care spending from one state to another — both per person and per diagnosis. And discrepancies also exist from one region to another within states, even from one hospital to the next in the same community. Most docs don't pay attention because they also don't fully understand the reasons for these variations and, more to the point, there is no direct effect upon them — they think.

This column was prompted by the recent release of a new report on big differences in costs for similar problems, even across hospitals in one community, in California. Almost without exception, this phenomenon manifest for whatever diagnosis you can name. In California, unexplained variations have been found to exist, for instance, in the cost of treating breast and prostate cancers, hip and knee replacements, angioplasty, coronary by-pass and elective induced childbirth.

Some startling examples include one hospital charging four times as much as the next for the same diagnosis; lumpectomy and radiation costing seven tires as much from one area in California to another; and the report also revealed the average health care costs from one state to another can double (Utah lowest, Maine highest). And these numbers are in addition to all of the many others listed in the literature have already been adjusted for age, ethnicity, education, health insurance and tumor size, where applicable.

Some obvious reasons come to mind:

1. There may not be consensus about what is the best treatment yet for a given problem

2. The science is always changing

3. Even in this internet age the dissemination and adoption of all available best practices may be spotty and/or slow

4. It is human nature to stick with what you know rather than change, sometimes too long

5. There are differences in physical access to specific care, because of distance in many rural areas for instance

6. Many docs may have vested economic or leadership positions in some treatment modality that they are disinclined to give up

7. All of these may predispose to a continuing commitment to the furtherance of these practices in the training and philosophy orientation of young docs.

One conclusion that may fairly be reached from these studies is that there is both widespread over- and under-treatment of many common medical problems. And this observation explains a part of the burden on any measure of quality as well as over and under treatment being a major cost driver.

These findings are important to any consideration of change in our means and methods of delivering medical care in America. The evidence of these wide and glaring discrepancies is pertinent to every doc and every training program for obvious reasons.

First, we are all going to have to become better aware of what others are doing. And then we are going to have to pay much better attention to whatever the current, evidence-based best practices are for a given problem. Being more aware means that there will be better communication and, therefore, a means to be held accountable for our medical choices. In turn, this change will directly affect our autonomy, our authority and our pocketbooks more than ever.

No one is entirely comfortable with change, even if the change appears to be rational and works to the betterment of all concerned. Emotionally, at least, oxen will be gored and there will be howls of protest. We realize that this move to accountability of best practices to improve quality and control costs on a local, state or national level will not happen quickly, smoothly, evenly or soon. The old conundrum of “good news and bad news.”