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Awareness of the Disparity in Health Care Costs

Atul Gawande pointed out, using concrete examples, the tremendous difference in health care costs in two similar Texas cities without apparent difference in the health of the residents.

This situation has been recognized for some time, but nothing much seems to have been done about it. Since we will probably have a serious attempt at health care reform, this discrepancy needs to be widely recognized. The reasons for it may give some clues for all of us about how to decrease the cost of health care without damaging the health of our citizens.

From the Wall Street Journal:

Health Reform: Costs, Variations in Care & Public Insurance

The health-reform theme of the day seems to be widespread variations in health-care costs in different areas around the country. If one city spends twice as much as another on health care without any noticeable benefit for patients, the thinking goes, there must be a way to find some savings.

This is an old idea among health wonks (see the Health Blog’s 2007 interview with Dartmouth’s Jack Wennberg, who has been talking about this for decades), but it has gained currency lately amid the big health-reform push in Washington.

Congress may wind up capping Medicare payments in areas where costs are unusually high, or sparing low-spending regions from cuts in Medicare reimbursement, the New York Times notes in a story today.

In 2006, this morning’s Washington Post notes, Medicare spent $5,812 on the average beneficiary in La Crosse, Wisc., compared with $16,351 in Miami, without clear evidence that the extra spending resulted in better care.

Meanwhile, the WSJ reports today, we could start seeing the first proposed health-reform bill as soon as this week from a Senate committee, the start of a stream of health-reform legislation likely to flow from different committees in both houses in the coming months. Congress is aiming to pass legislation by August and deliver a single bill to President Obama by October.

Two key debates remain
central, the WSJ notes. One is whether to include a national, government-backed insurance plan; a group of Republicans from the powerful Senate Finance Committee sent a letter to Obama on Monday reiterating their opposition to a public plan, which the administration backs. The other debate is, of course, how to pay for health reform.

How to pay? I think we are already paying enough. We spend more on health care than any other country in the world. And there are not many indices of health in which we are leaders.

The goal should be to bring the cost down.

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