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Schroeder on the Dartmouth Atlas

Posted Jun 29 2009 9:46pm
Pediatric cardiologist Jim Schroeder has been active responding to state and national level attention being paid to health care in Grand Junction, CO.

In particular, he has responded to some recent articles and opinion pieces in the Grand Junction news:

" Obama invited to tour valley health insurer" (June 11, 2009)

" Grand Junction shows how a responsible health system can operate" (June 18, 2009)

" GJ's acclaimed health care system may not be easy to replicate" (June 21, 2009)

Here is Dr. Schroeder's analysis, reproduced in full (with his permission):
Grand Junction in the Spotlight

It has been an unusually cold spring in Grand Junction, but hold onto your hats folks (not to mention your wallets) because it is about to snow in July.

Lil Ol' Grand Junction has popped up on the national scene in the current healthcare discussion. As a result, President Obama has been invited to visit Grand Junction as a shining example of how health care delivery should be done on a national scale and breathless local TV news reporters and members of the medical community are gushing. But in the excitement of being noticed by Washington some inconvenient facts are being ignored and other facts are being manipulated. Before we get too blinded by the spotlight of national attention that is about to hit, perhaps we should take a deep breath and regain a little perspective.

Why did Grand Junction's name pop to the surface? Here is the sequence of events. First, a large multi-year academic study was done at Dartmouth University (one of the lesser Ivy League schools) designed to look at regional variations in Medicare spending on health care. These results came out in April 2008. More recently Dr. Atul Gawande, an Ivy League surgeon, wrote an opinion piece or essay in the June 1 issue of The New Yorker magazine purportedly investigating why McAllen, TX has one of the nation’s highest levels of Medicare spending. Grand Junction’s name popped up in that article (alongside the Mayo Clinics) as one of the lowest spending regions. Next, this information came to the attention of one Barack Obama (an Ivy League graduate) who apparently is now using the Dartmouth study as a fulcrum to try to leverage advancement of the Democrat party’s health care proposal. Let me elaborate:

1. The Dartmouth Atlas: This study contains some intriguing data but is also being misrepresented in some ways. To briefly recap, the Dartmouth Atlas collected and analyzed data concerning the amount of Medicare dollars expended during the last two years of an individual’s life. They did this by the simple expedient of starting at the time of each person’s death and looking backward at Medicare records over a two year period. Patient expenditures were assigned to the primary hospital used during that two-year look back period and also to the city of residence at the time of death. Patients who were enrolled in a managed care plan were not included in the analysis. The data showed a wide range of variation between individual hospitals, cities and regions in the amount of dollars spent by Medicare in the last two years of a person’s life. For example, for inpatient hospital costs the values ranged from $13,706 (Dubuque, IA) to $51,917 (Manhattan) per deceased person. Grand Junction came in at $14,739 and was the lowest among 7 regions in Colorado while McAllen, TX came in at $33,729. What the data did not provide was an answer for why these differences exist. The data also did not show whether these differences in spending had anything whatsoever to do with the quality of the health care provided or any outcome other than death. The data did not indicate one way or the other whether the only outcome included in the study (death) happened earlier or later in hospitals that spent a lot or spent a little. All the data showed is that some hospitals spent more Medicare money than others. As such, this study should serve as a starting point for further research, not as a measure of how to model health care delivery for the nation as a whole.

Here's where you need to hang on to your wallet, because what is about to happen is that the Dartmouth Atlas will be touted as showing that some regions (Grand Junction will be held out as the shining example) are "more efficient" at delivering healthcare while saving money! This in turn will serve as the anvil upon which health care spending throughout the country will be hammered into line by a federally controlled healthcare system. In fact, the Dartmouth study reveals absolutely nothing about efficiency. Before that discussion can even begin, there must be some agreement on what constitutes 'efficiency'. That will require looking at end points other than death, and will include individual interpretations of value, quality and lifestyle. But those things are much more difficult to measure, so we are about to be treated to an example of using the wrong data to support the wrong argument for the wrong purposes.

2. Grand Junction: There are some aspects of Grand Junction that are unique in respect to this discussion. Grand Junction is relatively isolated geographically, with substantial mountain ranges separating it from the two closest metropolitan areas (Denver and Salt Lake City). The economy of Grand Junction primarily consists of agriculture and energy exploration and production. There is not a large union presence or much heavy industry. Small businesses abound. There is one large hospital (St. Mary's Hospital) and one small niche hospital (Community Hospital). St. Mary's has a fairly wide range of services while Community Hospital is more limited (e.g. no obstetric or newborn services, etc). There is one large regional insurance company, Rocky Mountain HMO. Grand Junction has a disproportionately high number of family practice physicians compared to larger metropolitan areas and a smaller number of specialists and even fewer subspecialists.

These are some of the reasons the current local framework works for Grand Junction:

-geographical isolation (G.J. is an inland island)
-fairly homogenous patient population
-homogenous range of physicians (FP predominating)
-good range of basic services, but limited range of specialty services
-sicker (i.e. more expensive) patients often are sent to Denver or Salt Lake City
-limited range of industry (i.e. the large corporate purchasers of health insurance)
-lack of a strong labor union presence (i.e. strong voice in benefits/coverage of plans)
-lack of competition for hospital services
-lack of competition for specialty/subspecialty services
-dominant local health insurance provider (HMO)

Those same reasons are exactly why the Grand Junction model will not serve well as a useful model for national health care. But that won’t stop some from trying to jam the ugly stepsister’s foot into Cinderella’s slipper (gratuitous fairy tale reference).


3. The Cost Conundrum -- What a Texas town can teach us about health care

By Dr. Atul Gawande
Here is an excerpt from Dr. Gawande's article:
The Mayo Clinic is not an aberration. One of the lowest-cost markets in the country is Grand Junction, Colorado, a community of a hundred and twenty thousand that nonetheless has achieved some of Medicare's highest quality-of-care scores.

Michael Pramenko is a family physician and a local medical leader there. Unlike doctors at the Mayo Clinic, he told me, those in Grand Junction get piecework fees from insurers. But years ago the doctors agreed among themselves to a system that paid them a similar fee whether they saw Medicare, Medicaid, or private-insurance patients, so that there would be little incentive to cherry-pick patients. They also agreed, at the behest of the main health plan in town, an H.M.O., to meet regularly on small peer-review committees to go over their patient charts together. They focussed on rooting out problems like poor prevention practices, unnecessary back operations, and unusual hospital-complication rates. Problems went down. Quality went up. Then, in 2004, the doctors' group and the local H.M.O. jointly created a regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up. And costs ended up lower than just about anywhere else in the United States.

Grand Junction's medical community was not following anyone else's recipe. But, like Mayo, it created what Elliott Fisher, of Dartmouth, calls an accountable-care organization. The leading doctors and the hospital system adopted measures to blunt harmful financial incentives, and they took collective responsibility for improving the sum total of patient care.
Keep in mind when reading this excerpt:

-"Grand Junction... has achieved some of Medicare's highest quality-of-care scores"

The Dartmouth data does not assess "quality of care". If he is referring to some other measures of quality he does not specify the source.

-"Problems went down. Quality went up."

There is no citation or data to support this comment other than an interview with Dr. Pramenko.

-"Then, in 2004, the doctors' group and the local H.M.O. jointly created a regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up. And costs ended up lower than just about anywhere else in the United States."

Once again, there are no data linking the creation of the regional information network with lowering of costs, decreased problems or increased quality. In fact, the Dartmouth data was collected from the beginning of 2001 to the end of 2005. The majority of the Dartmouth data therefore preceded the existence of the network (founded in 2004). In addition, since managed care Medicare patients were not included in the Dartmouth analysis, attributing any supposed savings to the HMO is dubious at best.

Dr. Gawande goes on to conclude that the reason for high expenditures in McAllen, TX is overutilization of medical services. Unfortunately, there is no definition of what constitutes "over-" or "under- utilization other than the cited dollar expenditures. Carried to its ridiculous extreme that would mean spending zero dollars would equal the "most efficient" strategy.

4. Having personally practiced medicine both in South Texas (San Antonio, just a couple hundred miles north of McAllen) and in Grand Junction, I can offer some perspective on the discrepancies between the two regions.

I can tell you from first-hand experience that there are huge differences in the collective mindsets of the medical community of South Texas when compared to the medical community of Western Colorado. Whether the differences reflect inherent cultural differences of either the general population or the doctors, historical evolution of medical services in the respective areas, demographic pressures, or some other factors I cannot say. I would not, however, be going too far out on a limb to say that corruption is rampant in South Texas. The mindset I saw when I lived there was one of "bill as much as you can get away with and then bill some more". Medicaid fraud was an everyday occurrence if not a way of life and diagnostic testing was used indiscriminately as a revenue source.

The mindset in Grand Junction has more typically been one of primary care, prevention and less utilization of diagnostic testing and subspecialty services. While it is safe to say that McAllen "overutilizes" it could be equally valid to say that Grand Junction "underutilizes".

5. It is reasonable and probably important to wonder why there are local and regional variations in health care spending. For now however, the available data raise interesting points of speculation rather than providing any answers. One could even make the case that regional variation in spending is not inherently a bad thing. We seem to be continuing to experiment on various ways of delivering health care. What works for Grand Junction will probably not work for Los Angeles or McAllen, TX.

Almost certainly a "one size fits all" nationalized approach will be untenable. Dr. Gawande acknowledges this to an extent when he calls for rewarding doctors and hospitals that unite into "accountable-care organizations, in which doctors collaborate to increase prevention and the quality of care, while discouraging overtreatment, undertreatment, and sheer profiteering."

Health care is, like any other commodity, finite in its supply. When you get right down to it, the entire health care debate can be conceived of as wrestling with the question of how to distribute a finite number of dollars for the purchase of health care services for a diverse population of 300 million. The only way to do that is by allocating expenditures or resources, or in other words, the dreaded "R"-word... rationing. Like it or not, rationing is at the core of every single healthcare reform proposal under consideration. Every entity that has a hand in the pie is trying with all their might to hang onto their piece and maybe get a little bit of someone else’s while those who seek to control the system are trying to fairly divide the pie.

Free market advocates believe that individuals making decisions in their own rational self interest, using the fruits of their own labor will collectively make wise decisions that will result in an inherent balance or "fairness" of the system. Those who value a given product or service more will choose rationally to spend more of their own money to purchase that product or service. Those who don't value a given product or service can choose to buy a boat or ATV instead. On the other hand, advocates of nationalized healthcare (including the current Congress and Administration) believe that a centralized government agency or oversight committee can efficiently collect individual wealth from a segment of society, pool that money for the purchase of health care goods and services for "all" and micromanage the delivery of these multitudinous goods and services and allocate resources effectively and fairly from Washington, D.C.

The questions you should be asking are these: Who will be making the rationing decisions and will those decisions be in your best interest? How is quality defined and how is it measured? What outcomes are measured and how accurately can they be measured? Does the raw data actually support the claims that are being made? Who gets to decide how much money gets spent on your health care during the last two years of your life, or the last five years of your life or any other arbitrary length of time?

We can only hope that what is good about the local medical system does not get swallowed up by a voracious federal juggernaut or glossed over in a meaningless sound bite. Is Grand Junction really a shining example of how to run health care or are we just giddy that a national celebrity might come to visit? Is that bright light the spotlight of a grateful nation or the headlight of an onrushing federal healthcare train barreling down the tracks directly at us? Listen carefully and critically to what is said. Take time to educate yourself. Speak up among your family, friends, community leaders and legislative representatives and let them know where you stand. And finally, wear your mittens and a sweater, Grand Junction, for the snow job is about to begin.


James K. Schroeder, MD

Dr. Schroeder is a practicing Pediatric Cardiologist currently living and working in Grand Junction. He has previously practiced medicine in the military for 13 years and in San Antonio, TX for 8 years. He attended high school in the Palisade High School right here in the Grand Valley. He attended college at West Point and the University of Colorado and medical school at Tulane University in New Orleans. Dr. Schroeder cares deeply about the future of his profession and the future his grandchildren will inhabit.
Dr. Schroeder makes many excellent points.

My only additional comment is to note that when producers and consumers are allowed to exchange goods and services in a free market (which the current system is not), the result is not rationing. Instead, it's an allocation based on people acting according to their own values and priorities in a just fashion.

Someone who purchases health care from a willing provider has earned it.

If someone needs medical care but can't pay for it, then he should ask for voluntary charity from others. But he should not demand it as some sort of "right" owed to him by a provider -- that would be asking for the unearned.

In contrast, rationing is a system in which the government allocates some good service according to its assessment, independent of the wishes of those who produce it. This violates the rights of the producers and the other consumers who may wish to trade with the producer on other voluntary terms.

This is the gross injustice of rationing, and we've seen the end result in other countries such as Canada and Great Britain, where the government decides who gets what sorts of access to advanced technology, and when.

Let's hope we never see that in the US.
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