Higher Medicare spending may surprisingly lead to lower quality health care services, according to a recent study by Dartmouth economics professors Katherine Baicker and Amitabh Chandra.
"This negative relationship may be driven by the use of intensive, costly care that crowds out the use of more effective care," the report states.
The study focused on the federal Medicare program, which serves the elderly. Citizens in different areas of the country pay for Medicare at different rates, and states with higher levels of Medicare spending don't necessarily receive higher quality care, according to Baicker."We don't think that spending money causes worse quality care, rather we think it's a marker for a different style of healthcare being provided," Baicker said. "One possible mechanism for this negative connection is that states with a lot more specialists and fewer general practitioners spend more money and have lower use of effective care."
States with more general practitioners offered more effective, lower-cost care. The study showed that simply adding one general practitioner per 10,000 people lowered costs of $684 per beneficiary and increased the quality of care provided.
The study also showed the opposite effect when specialists were added to the state. One specialist per 10,000 people both increased spending and lowered the quality of care, according to the study.
"Improving quality of care has everything to do with how the money is spent," Chandra said. "And 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."
This evidence begs the question of why states spend more money for lower-quality care.
Baicker said that these states "were spending more money on intensive care with questionable value to patients. For example, putting patients in their last six months of life in the ICU."
"The use of things like expensive end of life care hasn't been correlated with better patient outcome or lower patient mortality or greater patient satisfaction," Baicker added.
End-of-life care tends to be pricey and "crowds out" high-value, effective care, the study said.
