Dartmouth Medical School professor H. Gilbert Welch argued that soaring health care costs can be attributed in part to the financial incentives of physicians and hospitals in a lecture held Wednesday night in the Medical School's Chilcott Auditorium. Echoing current rhetoric in Washington, D.C., Welch said that the current set of incentives encourages overly aggressive screening and treatment.
Health care expenditures as a percentage of gross domestic product rose from 5 percent to 16 percent over the last 49 years, said Welch, who is also the co-director of the Center for Medicine and the Media at The Dartmouth Institute for Health Policy and Clinical Practice.
Reducing health care spending is both economically important and beneficial to health care quality, Welch said, noting that excessive treatment can often have negative effects.
"Excessive intervention is particularly problematic at two extremes of health: the well and the dying," Welch said. "Aggressive care for the dying is inhumane, and as for the well, it's hard to make them any better."
Welch cited a study by DMS professor Elliott Fisher, director of population health for TDI, that found effective care was provided equally to multiple patients with a particular illness, regardless of how much money the patients spent on care.
"The more money you spend, the worse patients tend to do," Welch said, noting that aggressive treatment can often cause greater harm than the initial problem.
"Let's not deliver services that don't work, and let's not deliver services that patients don't want," Welch said.
Doctors' current financial incentives to provide excessive treatment presents a major barrier to lowering health care spending, Welch said, noting that an increase in national health care expenditures means that incomes for those working in health care will also increase. Welch likened reducing health care costs to putting the current health care system on a diet.
"Diets are hard, but imagine being asked to go on a diet while you are being paid to eat more," Welch said. "The problem is the financial incentives of the current system, in which doctors and the institution they serve are paid to do more."
Welch advocated paying physicians a salary, rather than compensation for each procedure performed, and giving hospitals a predetermined amount of money to care for a well-defined population.
Salary-based compensation systems like the one used at the Mayo Clinic in Rochester, Minn. have been lauded both on Capitol Hill and in the White House.
"In the future, doctors are going to be more accountable," Welch told the audience, composed largely of DMS students. "Some of you may go willingly, and some of you will go kicking and screaming."
Welch also pointed to the wide variation in treatment across the country as a barrier to reducing costs.
The Dartmouth Atlas of Health Care, which documents variations in the distribution of medical resources throughout the country, found that residents of Boston, Mass., spend 50 percent more days in the hospital per capita than do residents of New Haven, Conn., although the two cities have very similar population demographics, Welch said.
The only possible explanation for this discrepancy, according to Welch, is a difference in physician treatment practices between the two cities.
"Physicians' assessment of patients' needs is often dominated by physician preference," Welch said, adding that "the scientific basis of much of medical practice is very weak."
Welch also highlighted that the percent of Americans without health insurance rose from 13 percent to 16 percent from 1987 to 2004.
"This is an embarrassment for the richest country in the world," Welch said.
Individuals and small business should be required to purchase health insurance, Welch said, in an apparent endorsement of the insurance mandate advocated by President Barack Obama. He also argued that the government should expand Medicaid, adding that he would like to see a public option for health insurance.
Responding to a question from the audience, Welch said tort reform should be a key aspect of health care reform, although he added, "It would be a mistake to say that the only reason health care costs are rising are lawyers."
