More Medicare services, quality not always linked

Washington -- A new study has revived a Medicare conundrum: providing additional health care services seems to do little to improve the overall quality of care provided to patients.

Researchers from Dartmouth College in New Hampshire found that states in which Medicare beneficiaries were provided a greater amount of services or more expensive procedures scored lower on quality measures than states that relied more on primary care services.

The study, published on the Web site of the policy journal Health Affairs, looked at 24 quality measures developed by Medicare's Quality Improvement Organizations for use in hospitals and also looked at various patient satisfaction measures. The researchers found that providing an additional $1,000 worth of services corresponded with an overall quality ranking almost 10 slots lower.

In New Hampshire, which had the highest overall quality ranking, Medicare spending was about $5,000 per patient in 2001, while Louisiana had the lowest quality position even though expenditures were about $8,000 per individual. The researchers also found a correlation between spending and the percentage of specialists. States where more physicians are general practitioners had higher quality of care and lower cost per beneficiary. Increasing the number of general practitioners by one per 10,000 residents translated into a quality ranking 10 positions higher and per-beneficiary spending $684 lower.

But the study may not have adequately measured the benefits of having greater access to specialists in certain cases. "They may be better at the treatment of more acute conditions," the authors said. "Although specialists may not drive the provision of effective care, they often provide better care in their area of specialty."

The results mirrored findings from several well-known studies that have measured the link between spending, quality of care, and physician supply. While the evidence of the inverse relationship is mounting, lawmakers and policy experts are still unsure how to level the playing field.

"Health care leaders should not make the mistake of thinking that we can only improve the quality of health care delivered to elderly Americans by spending more money," said Katherine Baicker, PhD, the study's lead author. "Instead, we could simply use existing dollars much more effectively."

Variation in Medicare spending from state to state has been a hot issue for policy-makers lately. States where spending is lower have argued for greater payment equity. However, arguments that beneficiaries are being shortchanged by the payment structure have been somewhat diminished by the finding of higher quality of care in those states.

Calls for wiser use of Medicare dollars

Raising spending in low-cost states is unlikely to improve quality of care, while lowering spending in high-cost states could reduce quality further, the authors said.

"Improving quality of care has everything to do with how the money is spent," said co-author Amitabh Chandra, PhD. "There is good evidence that, in many cases, we are not spending it wisely now. We need to determine how to make better use of health care dollars, especially with the baby-boom generation about to enter the Medicare system."

The authors suggested that higher spending does not lead to lower quality of care but is instead an indicator of a particular style of health care in which an overabundance of specialists causes a greater use of intensive services that do not necessarily improve care.

The study helps dispute the notion that because the United States spends more on health care, it has better quality care, said Karen Davis, president of the Commonwealth Fund, a Washington, D.C., health policy group.

"What we want is not the most expensive health care system in the world, but the highest-performing on numerous measures, including measures of quality," Davis said.

"There are many ways to achieve this goal, including a greater federal role in establishing quality standards and clinical guidelines to provide guidance to private insurers and public programs, like Medicare and Medicaid, on what should be paid for," Davis said.

The Medicare Payment Advisory Commission has recommended that Congress implement greater use of quality measures in Medicare and begin to alter payment systems to tie payment to quality.

"Current payment systems are at best neutral and at worst negative toward quality," MedPAC Chair Glenn Hackbarth said. "At times, providers are paid even more when quality is worse, such as when complications occur as a result of an error."

The Medicare Modernization Act of 2003 took a major step in implementing greater quality control by requiring hospitals to collect and report quality data for all their patients, both Medicare and non-Medicare, in order to receive full payment in 2005.

In its March report to Congress, MedPAC recommended that Congress take additional steps to reward health professionals for quality.

The commission suggested providing bonus payments in hospitals and other health care settings for improving quality performance over time and for exceeding certain thresholds. Such payments could be funded by setting aside a small proportion of total payments and redirecting them to those who meet the quality criteria, the panel said.