In health care, more is not always better
The dominant perception in American medicine is that more is better: More insurance is better insurance, and more health care is better health care. If that were unambiguously true, cost control would be a really hard choice: Every dollar you weren't spending would be a dollar of health benefit somebody wasn't getting. But that's not what the evidence shows. Consider, as David Leonhardt does, the case of Richmond, Va.
Richmond has actually lost some of its hospital capacity over the last decade. In 1996, the area had 4.8 hospital beds for every 1,000 residents. Today, it has about three. The cause of this is, in large part, state regulations meant to cut down on supply. "Hospital care has been, in a word, rationed," Leonhardt says. The result?
The quality of care in Richmond is better than in most American metropolitan areas, according to various measures, and it continues to improve. Medicare data, for example, shows that Richmond hospitals do a better-than-average job of treating heart attacks, heart failure and pneumonia.
When I recently asked patients in Richmond whether they felt as if their care had been rationed, they found the question bizarre. “I feel like there’s nothing cheap about the care,” Janet Binns, a retired school district employee, said. After her elderly father fell down one morning, she e-mailed a doctor and was on the phone with him in minutes.
Yet when it comes to health care costs, Richmond’s rationing has made a clear difference. In 1992, it spent somewhat less than average, per capita, on Medicare — 126th lowest out of 305 metropolitan areas nationwide. Since then, though, costs have risen at a significantly slower pace than they have elsewhere. As a result, Richmond had the 39th lowest costs in 2006.
The regulations that squeezed the Richmond medical industry are much stronger than anything being contemplated on the national level. The state has a strong "certificate-of-need" program in which doctors and hospitals who want to move or expand need to demonstrate that there's a good reason to do so. That cuts down on expensive entrepreneurial medicine, in which doctors build out, say, a specialty cardiology unit and then, magically, it turns out that the area needed a lot more heart surgeries than it had previously been getting. And that, in turn, lowers costs. But it's hard to imagine any similar command-and-control solution being adopted on the national level.
Photo credit: Fayez Nureldine/AFP/Getty Images.
December 30, 2009; 11:18 AM ET
Categories: Health Economics , Health Reform
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