Getting Past Denial — The High Cost of Health Care in the United States Jason M. Sutherland, Ph.D., Elliott S. Fisher, M.D., M.P.H., and Jonathan S. Skinner, Ph.D.

From Medicare data Sick people require far more care than healthy people. Poor people require more care than rich people.

Individual and Regional Factors Contribution of individual and regional factors to the regional differences in price-adjusted health care spending. Survey respondents were categorized into five equal- sized quintiles on the basis of the average intensity of care in their region ( ).

Regional Differences Regional differences in poverty and income explain almost none of the variation. Health status does matter — it accounts for $593 of the $3,280 difference between the lowest- and highest-intensity regions, or just about 18%. But that leaves more than 70% of the differences in spending that cannot be explained away by the claim that “my patients are poorer or sicker.”

Utilization Rates

The Economics - Argument Some of the care “must” be unnecessary. Outpatient v. Inpatient care. Watchful waiting v. expensive tests. Care MB, MC MB MC C* How do we define C*?

Too Little Too Much The Economics - Argument If C* is correct then we have losses if we have “too little” or “too much” care. Consider C 1 or C 2. Care MB, MC MB MC C*C1C1 C2C2 Authors argue (implicitly) that if C* is “correct” and everything else is too much, we could save a lot of money and spend it on other things.