One statistic that you hear over and over in the health care debate is how much money we spend on treating people in "their last year of life".  I've never found this statistic particularly overwhelming. Obviously, people in their last year of life are usually very sick, and even without "heroic intervention" are going to be very expensive to treat because many of them require constant care.  Since labor is a primary input of the health care system . . .

But even if you ignore the labor, it is not necessarily true that we shouldn't spend much money treating people in their last year of life.  For one thing, we don't know that it's their last year of life--some of the people thus treated survive.  If heroic interventions give someone a one-in-four chance of survival, is that wasted money?  Even extending life for a short time may be worthwhile, if it gives people time to put their affairs in order and say goodbye to their families.  And some expensive chemotherapy is palliative care aimed at shrinking tumors enough to relieve pain.  How much is it worth to let someone stay awake in their last few months, rather than go out in a drug-induced stupor?

This New York Times piece suggests that there is considerably more ambiguity to the question of "last months of life" treatment than the neat stories we tell each other when we're trying to figure out how to save money

"If you come into this hospital, we're not going to let you die," said Dr. David T. Feinberg, the hospital system's chief executive.

Yet that ethos has made the medical center a prime target for critics in the Obama administration and elsewhere who talk about how much money the nation wastes on needless tests and futile procedures. They like to note that U.C.L.A. is perennially near the top of widely cited data, compiled by researchers at Dartmouth, ranking medical centers that spend the most on end-of-life care but seem to have no better results than hospitals spending much less.

Listening to the critics, Dr. J. Thomas Rosenthal, the chief medical officer of the U.C.L.A. Health System, says his hospital has started re-examining its high-intensity approach to medicine. But the more U.C.L.A.'s doctors study the issue, the more they recognize a difficult truth: It can be hard, sometimes impossible, to know which critically ill patients will benefit and which will not.

That distinction tends to get lost in the Dartmouth end-of-life analysis, which considers only the costs of treating patients who have died. Remarkably, it pays no attention to the ones who survive.

. . .


According to Dartmouth, Medicare pays about $50,000 during a patient's last six months of care by U.C.L.A., where patients may be seen by dozens of different specialists and spend weeks in the hospital before they die.

By contrast, the figure is about $25,000 at the Mayo Clinic in Rochester, Minn., where doctors closely coordinate care, are slow to bring in specialists and aim to avoid expensive treatments that offer little or no benefit to a patient.

"One of them costs twice as much as the other, and I can tell you that we have no idea what we're getting in exchange for the extra $25,000 a year at U.C.L.A. Medical," Peter R. Orszag, the White House budget director and a disciple of the Dartmouth data, has noted. "We can no longer afford an overall health care system in which the thought is more is always better, because it's not."

By some estimates, the country could save $700 billion a year if hospitals like U.C.L.A. behaved more like Mayo. High medical bills for Medicare patients' final year of life account for about a quarter of the program's total spending.

. . .

Indeed, U.C.L.A. and five other big California medical centers recently published their own research results with a striking conclusion: for heart failure patients, the hospitals that spend the most seem to save the most lives.

. . .

The California researchers say they also found much less variation among the six hospitals than the Dartmouth data would indicate after they took account of significant differences among the patients the hospitals treat, including the many patients who come to U.C.L.A. for a transplant, who are, by definition, extraordinarily sick.

Over all, the California researchers found that the variation in spending among the six hospitals was significantly less than the level reported by Dartmouth. When looking at all patients hospitalized for heart failure, for example, the variation in use of resources was 27 to 44 percent lower than when they looked at only the patients who died. And that corresponded with a separate, informal analysis of Medicare spending by the Congressional Budget Office, which after adjusting for the severity of illness in patients and differences in prices among regions, found less striking variations in spending.

A report from the Medicare Payment Advisory Commission released this month also found less variation.

Dr. Rosenthal, who argues that there are also fundamental socioeconomic differences between patients in the poorer sections of Los Angeles and those in the Mayo Clinic's small and solidly middle-class hometown of Rochester, Minn., was co-author of an op-ed article in The Los Angeles Times last summer making that case. "Health care costs are significantly higher in areas of poverty," he wrote.

I have no doubt that we waste a lot of our medical spending.  But I am skeptical of any theory--be it the Laffer curve or Comparative Effectiveness Research--that tells politicians and voters that they can have what they want essentially for free.  The universe is rarely so benevolent.


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