Commenter Marc pointed me to this recent article by Elliott Fisher, Julie Bynum, and Jonathan Skinner on regional variation in heath costs across the United States.
Commenter Ao pointed to this Congressional Budget Office report which, to me, was a bit disappointing. It had some nice maps and charts but did not seem nearly as serious as Gawande’s article in trying to understand what was going on.
Finally, Alan Zaslavsky, a statistician who specializes in healh-care economics (and who uses multilevel models) wrote:
Atul Gawande’s article in the New Yorker is an excellent review of some of the issues we have been struggling with in health policy research. While a lot of energy has gone into looking at the impact of various incentive schemes (public reporting of quality measures, “pay for performance”) on quality of healthcare, it has been difficult to address the kinds of issues of organizational culture described in the article. The differences in provider structure and culture that are key to success or failure in providing high-quality, efficient care are not that readily brought into analysis — the variables are just not measured and available. So instead we have very convincing case studies — the McAllen market at one extreme and the integrated Kaiser, Geisinger etc systems at the other.
One problem is that many of the analyses take place at the level of the health (insurance) plan, but health plans in most cases are not in the business of providing care, they are in the business of buying it. (Even some of the original staff-model HMOs went through the transition to being insurance companies, like HIP in New York.) The variables that are routinely available for analysis at the health plan level are very crude proxies for the underlying organizational structures and cultures. For example, some economists have told me that they are perplexed by findings that not-for-profit plans provide better-quality care than for-profits, since both types of firms should be subject to similar incentives. What this leaves out is the distinct histories of some of the leading not-for-profits, and consequent differences in organizational cultures.
I do highly recommend the work of the Dartmouth group (including Jon Skinner and Elliott Fisher, mentioned in the article) on area variations to interested readers. However, it does suffer from some of the same limitations — the variations can be found and clearly show that more is not always better, but it is hard to say what actually drives the differences or what can be done to implant the cultural and organizational features that would make more areas look like the best areas. [emphasis added]
While I [Zaslavsky] am a proponent of a universal system of health care, I don’t think that will be enough to solve our problems without some fundamental changes in the incentives and structures under which care providers operate. Paradoxically, “rationalization” has meant squeezing out not the most wasteful aspects of care but some of the unprofitable but essential services that could make care more effective.
Perhaps more could be done to take the quantitative analyses of Fisher et al. and Zaslavsky and his colleagues, and see what is needed to move toward useful recommendations. This is all on top of the difficult political issues; for example, doctors in the U.S. get paid a lot and I don’t think they’d be happy about getting less money.