Over-treating does not guarantee better outcomes, report says.

Medicare-funded treatment for the chronically ill does not necessarily result in positive outcomes, a new report from the Dartmouth Institute for Health Policy and Clinical Practice indicates.

The report signifies that it is necessary to overhaul the ways in which Americans with chronic illness are cared for, said Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation. “The extent of variation in Medicare spending, and the evidence that more care does not result in better outcomes, should lead us to ask if some chronically ill Americans are getting more care than they or their families actually want or need,” Lavizzo-Mourey said.

Medicare and most other payers encourage the overuse of acute-care hospital services, especially for chronically ill people, and thus the cost scales up, but institutions that give better care can do it at a lower cost because they don’t overtreat patients, the report says.

Care for chronically ill patients accounts for 75 percent of healthcare spending. Overuse and overspending reveal that the healthcare system as a whole lacks efficient, effective ways of caring for people with severe chronic illnesses. There are staggering variations in the number of services that patients with severe chronic disease receive at the end of life, depending on the hospital, region or state, the report says.

“Medicare policy, including reimbursement, should support ‘organized’ systems of effective care management, with a strong primary-care component,” said John E. Wennberg, lead author of the report. “The federal government should also support better research into clinical practices for managing chronically ill patients.”

With rising Medicare spending, providing efficient, effective and economic healthcare has become critical. It isn’t so much what each medical service costs, but how many services doctors prescribe that matters, the study authors say. So getting usage under control is the most critical factor in controlling costs.

Elliott S. Fisher, coauthor of the report and director of the Center for Health Policy Research at the Dartmouth Institute for Health Policy and Clinical Practice, recommends benchmarking the best systems and using policy to drive providers toward the benchmark by holding them accountable for the volume of services they deliver. 

The report analyzes the records of millions of Medicare enrollees who died from 2001 to 2005 and had at least one of nine severe chronic illnesses. To have a comparative evaluation, they collected similar data from gold-standard healthcare systems such as the Mayo Clinic.

With the help of these records, researchers benchmarked care nationally to the care provided in the region where Mayo has its flagship clinics and is the dominant healthcare provider. Over the period of five years, the total spending of the population in this study was $289 billion. If the spending per patient everywhere mirrored that in Mayo’s home region of Rochester, MN, Medicare could have saved $50.1 billion, or 17.3 percent of all spending on these patients alone.

The study revealed that there are no fixed guidelines on the treatment of illness. Confusion prevails on when to hospitalize these patients, admit them to intensive care, refer them to medical specialists or -- for most conditions -- when to order diagnostic or imaging tests. As a consequence, the following factors drive decisions about care:

            • Both doctors and patients generally believe that more services -- that is, using every available resource, such as specialists, hospital and ICU beds, diagnostic tests, imaging and others -- mean healthier patients.

            • Based on this assumption, it is the supply of beds and treatments and specialists -- not how sick people are -- that determines how much they get used. The supply of services creates its own demand, so regions with more resources have more usage and thus higher costs.