Smart bombs

Competition is touted as the answer to rising health care costs and covering the approximately 46 million uninsured Americans. Presumably, that means areas with the most hospitals, clinics and doctors offer cheaper care because there are more choices. It seems the opposite is true, according to 30 years of research into Medicare at Dartmouth University.

There is a correlation between the supply of health care and the amount Medicare is billed. The larger the supply, the bigger the bill. The Dartmouth Atlas of Health Care shows that the national average for reimbursements per hospital enrollee is $6,611. In Spokane, it’s $5,429. In Miami, it’s $11,352. The average price tag per patient in New Jersey is $8,076. In Washington state, it’s $5,523.

Well, OK, that might be unfair, but at least in Miami and Jersey, with all those specialists bumping into each other, the patients are getting better care, right? Wrong. Dartmouth found that outcomes are not any better. In fact, it can be worse, because of increased exposure to hospital infections and medical errors.

The answer is not to bump up service in Spokane, but to base Medicare payments on efficiency and outcomes. If that were done, the system could save billions of dollars that are now going to providers who aren’t helping patients with that excess money. With the savings, we could whittle the number of uninsured people.

Rewarding inefficiency. Another perverse Medicare incentive is the formula used to reimburse doctors. Because Washington state had a relatively efficient health care system at the time the rates were set, the government decided that our state’s doctors didn’t need as much as doctors in inefficient states.

That’s why the state is in the bottom 10 for physician reimbursements. It’s also why an increasing number of doctors here are refusing to see Medicare patients.

Healthy profits. Before private care proponents get cocky about the inefficiencies built into Medicare, they better take a look at Medicare Advantage, which provides coverage using the private insurance model. The Congressional Budget Office reports that Medicare Advantage is reimbursed 12 percent more to deliver the same service as regular Medicare.

Putting Medicare Advantage on a level field would save the government $154 billion over 10 years. We could cover a lot of people with money that’s going to insurance companies.