Last and Proud of It

Report finds that Idaho spends the least on Medicare chronic illness expenses; has best outcomes

WASHINGTON, D.C. -- Idaho Senators Larry Craig and Mike Crapo highlighted a recent study by the Dartmouth Atlas Project that looks at the cost to care for patients with severe chronic illnesses compared with the results for patients. The study found that Medicare could save 30 percent on chronic illness and actually improve medical care.

In a letter to Health and Human Services Secretary Mike Leavitt, Idaho Senators Larry Craig and Mike Crapo highlighted a recent study by the Dartmouth Atlas Project, that looks at the cost to care for patients with severe chronic illnesses compared with the results for patients. The study found that Medicare could save 30 percent on chronic illness and actually improve medical care. According to the Project's website, "The focus of the new study is the care of Medicare beneficiaries with one or more of twelve chronic illnesses that accounts for more than 75% of all U.S. health care expenditures. Among people who died between 1999 and 2003, per capita spending varied by a factor of six between hospitals across the country." The report concluded, "Almost one-third of Medicare spending for chronically ill is unnecessary. . . Improving care could also lower costs."

Craig and Crapo noted that the report listed Idaho as one of states with the lowest expenditures for Medicare patients with chronic illnesses. While one might initially consider this a negative, the report documents that the states with the lowest expenditures, number of doctor visits, etc. actually had better outcomes for the patients.

In the letter, the Senators wrote, "Our home state of Idaho had the lowest expenditure rate in the nation at just over $23,000 per patient compared with New Jersey, which had the highest, at nearly $40,000 per patient.. . . What is most interesting and worthy of attention in our judgment is the fact that neither the higher per patient expenditures, nor the increased physician visits were associated with any improved outcomes for Medicare patients. In fact, just the opposite appears to be the case. The report found that `greater use.appears to be associated with worse outcomes, poorer quality and lower satisfaction.'"

The Senators go on to point out that Medicare is the largest entitlement expense of the federal government, and is expected to only become larger, stating that Medicare is set to, "saddle the next generation of Americans with a fiscal challenge that will necessitate draconian cuts in all federal programs or a massive tax increase."

The Senators end the letter asking the Secretary to use this report to take bold action on Medicare reform, focusing efforts on promoting good health and on "evidence-based medicine with strong performance and accountability standards to ensure the best outcomes for all patients."

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A printer-friendly version (PDF, 55 KB) is available and the text of the entire letter is below.

May 22, 2006

The Honorable Michael O. Leavitt
Secretary
Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC 20201

Dear Secretary Leavitt:

We write to bring to your attention a recent report from the Dartmouth Atlas Project. This report raises numerous issues that require significant attention from the Centers for Medicare and Medicaid Services and the United States Congress. As you may be aware, the Atlas Project strives to provide accurate information on the expenditure of health care dollars across the United States and to identify important variations in the delivery of health care services on national, regional, and local levels.

Dartmouth's report, The Care of Patients with Severe Chronic Illness, studied expenditures by Medicare on patients with severe chronic illnesses during the last two years of the patients' lives. The report found that Medicare devotes significantly more financial resources, on a per-patient basis, to beneficiaries with chronic illnesses in New Jersey, California, and New York than are spent on those in many other states. In fact, our home state of Idaho had the lowest expenditure rate in the nation at just over $23,000 per patient compared with New Jersey, which had the highest, at nearly $40,000 per patient. Further, the report found that patients in New Jersey saw a physician an average of forty-one times during the last six months of life (the highest average) as compared with your home state of Utah, where patients saw a physician approximately seventeen times during their last six months of life (the lowest average).

What is most interesting and worthy of attention in our judgment is the fact that neither the higher per patient expenditures, nor the increased physician visits were associated with any improved outcomes for Medicare patients. In fact, just the opposite appears to be the case. The report found that "greater use...appears to be associated with worse outcomes, poorer quality and lower satisfaction."

As you know, the Medicare program is the largest entitlement expenditure from the federal budget and it is growing at alarming rates. Estimates suggest that the program, if left unchanged, will saddle the next generation of Americans with a fiscal challenge that will necessitate draconian cuts in all federal programs or massive tax increases. With such dire projections, we must promote a payment system that ensures improved outcomes and the proper utilization of services. Ultimately, such a payment system will more effectively address the needs of the chronically ill and better confront the fiscal challenges facing the system.

We urge you to use this report as a call to action for bold thinking about necessary changes to the Medicare system. We must make Medicare a program that concentrates our limited dollars first on care and services that promote good health. Then we have to couple evidence-based medicine with strong performance and accountability standards to ensure the best outcomes for all patients.

We stand ready to assist you with any efforts you believe are necessary to achieve such a health care program for the nation's elderly.

Thank you for your attention to this matter.

Larry E. Craig, United States Senator
Mike Crapo, United States Senator