Posted on October 8, 2004

Practice Variations and Health Care Reform: Connecting the Dots


Perspective: By John E. Wennberg
Health Affairs
October 7, 2004

Several papers in this Health Affairs collection show once again that unwarranted variation-variation not explained by illness, patient preference, or the dictates of evidence-based medicine-is a ubiquitous feature of U.S. health care. As shown in several of these papers, health care systems fail to provide in full measure such simple life-saving, morbidity-sparing interventions as immunizations, diabetic glucose monitoring, and the use of drugs for those with heart attacks. Every region and every state exhibits underuse of effective care, some more so than others. James Weinstein and his colleagues provide further evidence that the incidence of discretionary surgery, the use of which should depend on patient preference, is unduly influenced by local physician opinion, which has resulted in striking long-term variation in the risk of surgery among local regions-the “surgical signature” phenomenon. Elliott Fisher and his colleagues show that among the chronically ill, the frequency of physician visits, diagnostic testing, and hospitalization and the chances of being admitted to an intensive care unit (ICU) depend largely on where patients live and the health care system they routinely use, independent of the illness they have or its severity. Katherine Baicker and her colleagues show that variation affects minority groups as it does white Americans, which clouds the interpretation of racial and ethnic disparities based on national average rates.

While noting that the U.S. supply of physicians grew remarkably over the past twenty years, David Goodman shows that growth in aggregate supply does not “cure” variations: In 1999 the per capita supply of generalist physicians varied more than twofold and that of medical specialists more than fivefold among regions. I and my colleagues document that Medicare spending varies more than twofold among regions, but more spending is not associated with better quality, as measured by reduced underuse of effective care, or, surprisingly, with more major surgery. Greater per capita spending buys more intensive intervention among patients with chronic illness: Those who live in high-cost regions experience more visits to medical specialists, tests, hospitalizations, and ICU stays than their counterparts living in low-cost regions. And because of the way Medicare is financed, regions with low costs end up subsidizing a sizable proportion of the care for those living in high-cost regions.

The irony, as Fisher and his colleagues show, is that patients with similar chronic illnesses who live in high-cost regions, including those who receive most of their care from prominent academic medical centers (AMCs), do not have better health care outcomes than patients living in low-cost regions. In other words, the patterns of practice in managing chronic illness in low-cost regions do not appear to result in the withholding of valuable care (health care rationing); rather, systems of care serving high-cost regions are inefficient because they are wasting resources.

Three needed reforms:

First, the quality agenda must be extended beyond effective care; the agenda should also address unwarranted variation in preference-sensitive treatments such as discretionary surgery and the overuse of physician and acute care hospital services in managing chronic illness.

Second, reform of the payment system must be undertaken to enable providers to deal with the complicated and interrelated financial, organizational, and behavioral issues that need to be resolved if the quality of patient decision making is to be improved and inefficiencies and waste in the treatment of chronic illness remedied.

Third, AMCs and the National Institutes of Health (NIH) must respond to the glaring weaknesses in the scientific basis for clinical decision making by undertaking the systematic evaluation of the everyday practices of medicine.

Editor’s Note
John K. Iglehart

Thirty-one years ago, researchers Jack Wennberg and Alan Gittelsohn began what has become a long odyssey to better understand the distinctive variations in clinical practice patterns that characterize medical care in the United States. By publishing their landmark paper in Science (14 December 1973), they launched a new chapter of health services research in relation to clinical care. In 1984 the editors of Health Affairs, struck by how resistant providers and patients were to addressing unwarranted practice variation, devoted a thematic issue to the subject (Summer 1984). Fast forward to today, and one can only marvel at how little variations that are unexplained by, as Wennberg notes, “illness, patient preference, or the dictates of evidence-based medicine” have been reduced.

With the publication of these papers, Health Affairs is once again lending its voice to the dialogue on variations. But for several reasons, this time the opportunities for real change seem more promising. First, Wennberg and his colleagues at Dartmouth Medical School have developed methods to link the practice variations with specific hospitals and physicians, and they plan to make provider-specific information available as part of the Dartmouth Atlas of Health Care project. As they note, provider-specific information can be used to identify efficient providers within a given region and should prove useful in configuring provider networks. Second, the opportunity to use this information to guide improvement is reinforced by the work of Elliott Fisher and colleagues, which shows that the problem of variation in intensity of treatment for chronic illness is primarily a problem of overuse and waste, not underuse and health care rationing. Third, as discussed in several papers, the puzzling problem of geographic variation in elective surgery is better understood and the value of shared physician-patient decision making, more firmly established. And fourth, the critical importance of creating economic incentives to reward providers who reduce unwarranted variation and the need for Medicare to assume greater leadership is increasingly recognized by payers and Congress alike. In the November/December 2003 issue of Health Affairs, fifteen prominent health policy figures, including Wennberg, signed an open letter to the Centers for Medicare and Medicaid Services (CMS) urging Medicare to assume more aggressive leadership in the “pay for performance” effort.

For the index to the twenty articles on variations in clinical practice patterns (web exclusive for 7 October 2004):

In many of the papers, suggestions are made as to how Medicare reform might facilitate many of the improvements needed in resource allocation that would correct the waste and inadequacies demonstrated by the variations in clinical practice patterns. But improving Medicare alone would not be adequate to correct systemic problems such as capacity variations of academic medical centers or variations in the physician work force.

If Medicare were the only source of funding health care in the United States, then it could use its monopsonistic power to reduce perverse variations in clinical practice patterns. That would provide us all with better value for our health care investment. But it is unlikely that we’ll see that value until we do take control of health care funding through a single payer, national health program.