Under the headline, “Medicare Plan for Payments Irks Hospitals,” today’s New York Times details the opposition stirred up by the government’s “value-based purchasing” initiative.  If you’re buying anything (and the US federal government is the largest purchaser of healthcare in the world), on what basis other than value would you want to buy?

The measure at issue is “Medicare spending per beneficiary” during hospitalization, and in the 3 days before and 90 days after. The hospitals and hospital associations that are complaining have, mostly, two beefs: “Our patients are sicker,” and “We can’t be responsible for what happens, and what tests and procedures doctors order, outside our walls.”

The government’s response to the first is that the system will be adjusted for older populations, more acuity, and other variables. The response to the second is more complex, but it amounts to: “Work it out.”

And there is good reason for this. In studies going back two decades, the Dartmouth Group has shown wide disparities in Medicare payments per beneficiary between regions and between hospitals. A recent Institute of Medicine study took the Dartmouth stats and, in response to all the talk from hospitals that “our patients are sicker,” or “but we have to pay for teaching and research,” re-worked them to back out all those confounding factors. The Dartmouth Group’s study showed that the most expensive areas spent three times as much as the least expensive. After the IOM backed out the confounding factors, the data still showed that the more expensive areas spent twice as much.  And the expense does not vary so much with inner-city status or number of illegal aliens as it does with whether health care in a given area is well-organized and coordinated or unorganized and fractured. It’s a really easy pattern to see if you stare at the maps of expense long enough, and know a lot about different healthcare markets.

Lack of care coordination is at the core of the mess healthcare is in, coordination between various parts of the healthcare system locally, on the ground, and coordination between the healthcare providers and the patients’ life. As Atul Gawande put it in his commencement address at Harvard Medical School last week, “It’s like no one’s in charge — because no one is.”

A reasonable response to a hospital or health system that claims, “Our patients are sicker,” is actually, “How did they get that way? What have you attempted to do about it?” That’s reasonable to ask because some organizations of various types, from hospitals to medical groups to employers to unions to state Medicaid administrators, have actually found ways to reduce the burden of sickness, even in very poor populations, for the people who show up in their system, even before they show up — and have saved money, even in cases where they are not getting reimbursed for it.

If an executive for a health system complains, “We don’t have any control over what those doctors do!” it is reasonable to ask, “Why not? What have you tried? What have you not done?” It is reasonable to ask because there are organizations that have been increasingly successful in working tightly with doctors, even doctors who do not work for them. There are many different ways of coordinating care, in hundreds of examples in scores of different contexts around the country, in cities and suburbs, in tribes and in Medicaid populations, for well-employed groups and retired folks on Medicare. No one model for coordinating care works for every market, every physician population, and every patient population, but the models are out there. It’s difficult, sometimes very difficult. It can be expensive, and it’s always time consuming. But other people are doing it, why not you?

Why not you? Let’s be clear: These extra costs do not represent some technical glitch in the reporting system. This is not an accounting argument. These extra costs mean real people with extra sickness, extra suffering, and extra unnecessary deaths. You don’t have to call in your house ethicist on this question. It’s a moral question, but it’s not a hard one. If you are in charge of some piece of the healthcare system, and you are not doing everything you possibly can to coordinate care in order to reduce costs, to reduce suffering and unnecessary death, what’s the moral accounting, for you, personally?

By Joe Flower