Friday, February 19, 2010

A Dispute over Dartmouth Data

February 19, 2010

An analysis written in the New England Journal of Medicine suggests that much of the Dartmouth Atlas research is flawed and that it should not be used to compare the relative efficiency of hospitals.

This is an academic argument. What the Dartmouth Atlas (DA) data show are that higher payments do not result in better outcomes or necessarily better care. DA doesn’t say that higher costs for some patients is bad.

There is no quarrel with the suggestion Dr. Bach makes that we should be cautious in drafting payment policy based on what Dartmouth Atlas shows us; oversimplifying the problem by paying all providers in high cost regions less, won’t solve the problem. But the argument that Dartmouth uses faulty methodology in drawing its conclusions is simply not true.

In a nutshell here is what the Dartmouth data show - Unwarranted variation occurs and it has at least three causes - underuse, overuse and misuse.

* Underuse is caused by patients not getting good evidenced based care (i.e., the standard of care is not met).

* Overuse is associated with supply sensitive care, which means we “fill the bed” or perform the service because the incentives to treat in a fee for service payment environment align with “more is better”

* Misuse is associated with preference sensitive care, which means that when there are
significant tradeoffs among available options, choices should be based on the patient’s own values; but often they are not. Misuse results from the failure to accurately communicate the risks and benefits of alternative treatments, and the failure to base the choice of treatment on the patient’s values and preferences.

Despite Dr. Bach’s contention that the DA findings lead policy makers to propose bad payment fixes (i.e., reform proposals to lower payments to high cost hospitals), that doesn’t invalidate the methodology used by DA. Data show that healthcare systems use what we build and the incentives in the systems are used to maximize reimbursements to providers.

The payment policy conundrum is that currently there is little available to Medicare as a payer to adjust its incentives other than “squeezing” payments when inexplicable claims clustering occurs. Payers are looking for easy mechanisms, and historical evidence shows that claims clustering is a solid fraud and abuse investigative tool.

Dartmouth has never claimed that examining costs alone is the only way to look at cost effective care, but when outcomes are not part of value equation in determining payment, why should analysis look any further? Just because DA doesn’t take into account every cost factor that might affect outcomes doesn’t mean those they do somehow render their findings meaningless.

The problem is real. DA’s methodology is not at fault, nor is it responsible for the payer’s inability to formulate sound policy. It is just one more reason why we need Congress to get out of the business of deciding what Medicare should and shouldn’t pay for.

Hospitals that provide effective care and treatment should be rewarded and we should reform indiscriminate payment systems that incentivize the wrong things.

Link: Report Cited by Obama on Hospitals Is Criticized, New York Times, February 17