Medicare: Lies, damned lies and statistics

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There’s nothing insurance companies fear more than
having to compete with a low-overhead public and nonprofit health care
option–say, Medicare. They’re in full opposition-research mode,
looking for statistics and studies that will prevent Americans–including Congress–from looking at Medicare as a model.

One of the items that Medicare-bashers are grabbing is a 2004 statistical study that found health quality was lower in states with higher Medicare spending–a case of looking down a pipe at one statistic. A broader study published recently in Health Affairs finds that Medicare simply spends more in poorer states with sicker people and lower overall health spending; better health actually corresponds with more state health spending per capita.

the abstract to the broader study, by Richard Cooper, a professor of
medicine in the Leonard Davis Institute at the Wharton School,
University of Pennsylvania:

Based on broad measures of health system quality and performance, states with more total health spending per capita have better-quality care. This fact contrasts with a previous finding that states with higher Medicare spending per enrollee have poorer-quality care. However, quality results from the total funds available and not from Medicare or any single payer. Moreover, Medicare payments are disproportionately high in states that have a disproportionately large social burden and low health care spending overall. These and other vagaries of Medicare spending pose critical challenges to research that depends on Medicare spending to define regional variation in health care. [Health Affairs 28, no. 1 (2009):w103-w115 (published online 4 December 2008; 10.1377/hlthaff.28.1.w103)]

 And here’s the abstract to the earlier study that opponents of universal care grabbed onto, by Katherine Baicker and Amitabh
Chandra, both professors of economics (not medicine) at Dartmouth:

The quality of care received by Medicare beneficiaries varies across areas.
We find that states with higher Medicare spending have lower-quality care. This negative relationship may be driven by the use of intensive, costly care that crowds out the use of more effective care. One mechanism for this trade-off may be the mix of the provider workforce: States with more general practitioners use more effective care and have lower spending, while those with more specialists have higher costs and lower quality. Improving the quality of beneficiaries’ care could be accomplished with more effective use of existing dollars.

Health Affairs, 10.1377/hlthaff.w4.184

There’s some logic to seeing more general practitioners as a boon.
But by only looking at dollars, not demographics, the authors blame
Medicare for the broader social and health problems of poorer states.
The authors are also backers of "improved" private insurance, not of
wider (or universal) access to a low-overhead program like Medicare.

The full studies are linked above.

insurance industry will grasp statistics like those in the Dartmouth
study and use its immense lobbying resources to protect itself.
Insurers’ aim is not to improve health care but to prevent any "public
insurance option" that resembles Medicare from threatening its
profitable business model. They want to keep the one-third or more of
every premium dollar that goes to administration, overhead and profit,
not health care, and they’ll try to scare Americans to death about
"government interference."

This time around, though, they may have a tougher time persuading the public that letting Medicare compete with private insurance is such a bad idea. Back in 1993, when the "Harry and Louise" ads helped kill the Clinton health reforms, health insurance companies weren’t so adept at canceling people’s health care when they get sick.

Consumer Watchdog
Consumer Watchdog
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