1. Reducing Regional Disparities in Health Spending: Framing the Debate David Wennberg and Friends Maine Medical Center Center for the Evaluative Clinical Sciences

2. Regional disparities in health care spending Part 1 -- Unwarranted variations in U.S. health care: findings from the ‘Is More Better?’ studies Part 2 -- What can be done about it?

3. Elliott Fisher, MD, MPH Therese Stukel, PhD Dan Gottlieb, MS F. L. Lucas, PhD Etoile Pinder, MS

4. Unwarranted variations in medical practice: a framework for thinking about the delivery (or non-delivery) of care… Unwarranted? Variations that cannot be explained by: Illness or need --- and dictates of evidence based medicine Patient Preferences Categories of variation Effective care Preference sensitive care Supply-sensitive services Causes and remedies differ for each category

5. Dartmouth Atlas of Health Care United States Hospital Referral Regions

6. Step 2: Group by regional spending level -- assigned based upon End-of- Life Expenditure Index Step 1: Select Cohorts Step 3: Validation (1) are patients the same at baseline? (2) does subsequent treatment differ? Step 4: Assess outcomes Follow cohorts for up to five years. Myocardial Infarction Colorectal Cancer Hip Fracture Medicare Population (MCBS) Elderly (U.S. Medicare) Study Design Q1 HRRs Q2 HRRs Q3 HRRs Q4 HRRs Q5 HRRs Low Spending High Process / Quality of Care / Survival

7. $ 3,922 $ 4,439 $ 4,940 $ 5,444 $ 6,304 Spending Regional Variations in the End-of-Life Expenditure Index (EOL-EI) and average per-capita Medicare spending $ 9,074 $ 10,636 $11,559 $ 12,598 $ 14,644 EOL-EI EOL-EI highly correlated (r = 0.81) with average per-capita Medicare spending

8. Effective Care Services of proven effectiveness…. It involves no significant tradeoffs--all with specific needs should receive them Conflict between patients and providers is minimal

9. Effective Care: Ratio of Rates in Highest vs Lowest Spending Regions 1.001.52.00.5253.0 1.001.52.00.5253.0 Reperfusion in 12 hours for AMI Beta Blockers at admission Aspirin at admission Beta Blockers at discharge Aspirin at Discharge Acute MI Mammogram, Women 65-69 Flu shot during past year Pap Smear, Women 65+ Pneumococcal Immunization (ever) General Population Lower in High Spending Regions Higher in High Spending Regions Exercise Test w/in 30 d

10. Preference-Sensitive Care Involves tradeoffs among outcomes Decision should reflect preferences of patient Scientific uncertainty often substantial

11. Preference-Sensitive Care: Highest vs Lowest Spending Regions 1.001.52.00.5253.0 1.001.52.00.5253.0 Coronary Artery Bypass Surgery (CABG) Coronary Angioplasty Procedures after AMI Cholecystectomy Hernia Repair Cataract Extraction Total Hip Replacement Major Surgery (all cohorts combined) Total Knee Replacement Back Surgery Carotid Endarterectomy Lower in High Spending Regions Higher in High Spending Regions Angiography Angiography among appropriate cases

12. Supply Sensitive Services Care strongly correlated with supply Generally provided in absence of strong clinical theory Evidence weak or non-existent on benefits.

13. Supply-Sensitive Care : Highest vs Lowest Spending Regions 1.001.52.00.5253.0 1.001.52.00.5253.0 Office Visits Initial Inpatient Specialist Consultations Inpatient Visits Psychotherapy Visits % of Patients seeing 10 or more MDs Physician Visits Electrocardiogram Ambulatory ECG (Holter) Echocardiogram Diagnostic Cardiology Procedures Lower in High Spending Regions Higher in High Spending Regions Chest X-ray Ventilation Perfusion Scan CT / MRI Brain Imaging Tests

14. Supply-Sensitive Care : Highest vs Lowest Spending Regions 1.001.52.00.5253.0 1.001.52.00.5253.0 Discharges Inpatient Days in ICU or CCU Total Inpatient Days Hospital Utilization Inpatient Days Feeding Tube Placement ICU or CCU days Emergency Intubation Care in Last Six Months of Life Vena Cava Filter Lower in High Spending Regions Higher in High Spending Regions Upper GI Endoscopy Pulmonary Function Test Bronchoscopy Electroencephelogram (EEG) Specialist Procedures

15. Findings Mortality

16. Decreased Risk Relative Risk of Death across Quintiles of Spending 1.001.051.100.95 1.001.051.100.95 Colorectal Cancer Q1 Q2 Q3 Q4 Q5 Hip Fracture Q1 Q2 Q3 Q4 Q5 Myocardial Infarction Q1 Q2 Q3 Q4 Q5 Increased Risk

17. Decreased Risk Change in relative risk of death per 10% increment in regional practice intensity: Acute Myocardial Infarction Cohort 1.001.021.040.98 1.001.021.040.98 Age < 80 Age > 80 Increased Risk Female Male Black Non-black Other location Non-Q MI Anterior MI Inferior MI Low risk (<15% 1yr) Moderate (15-30%) High Risk (> 30%)

18. Summary of Findings Increased spending across regions is largely devoted to “supply-sensitive services” Visit frequency, specialist services, tests, inpatient and ICU care. Residents of higher spending regions: Slightly worse basic access to care Equal use of major (potentially beneficial) procedures Quality measures generally somewhat worse No gain in function, survival or satisfaction

19. Implications Costs reflect the capacity of the system

20. Spending and capacity: the role of beds and medical specialists Low MD High Bed High MD Low Bed Low MD Low Bed High MD High Bed 1.19 1.34 1.35 1.18 1.59

21. Implications Costs reflect the capacity of the system Greater capacity is not necessarily better

22. Implications Costs reflect the capacity of the system Greater capacity is not necessarily better We’re wasting 30% of current spending on supply sensitive care alone…

23. Regional disparities in health care spending Part 1 -- Unwarranted variations in U.S. health care: findings from the ‘Is More Better?’ studies Part 2 -- What can be done about it?

24. Effective CarePoorly understood care processes Failure to learn VariationCause Develop systems of care capable of improvement Reward those who provide high quality care Construct benefits to ‘incent’ beneficiaries to become active consumers and to seek ‘high quality providers’ Remedy Principles to Guide Interventions

25. VariationCause Effective Care and Patient Safety Poorly understood care processes Develop systems of care capable of improvement MD-dominated decisions Preference Sensitive Care Shared Decision Making Construct Benefits to ‘Steer’ insured to high quality providers AND ‘incent’ them to seek SDM information and coaching Reward providers for participating in SDM Remedy Principles to Guide Interventions

26. VariationCause Supply Sensitive Care Variations in supply Assumption that more is better Micro: selective contracting with longitudinally efficient providers Demand excellence in effective care and preference sensitive care Macro: discourage continual increases in system capacity Effective Care and Patient Safety Poorly understood care processes Develop systems of care capable of improvement MD-dominated decisions Preference Sensitive Care Shared Decision making Remedy Principles to Guide Interventions

27. Regional disparities in health care spending Part 1 -- Unwarranted variations in U.S. health care: findings from the ‘Is More Better?’ studies Part 2 -- What can be done about it?