For Release: February 13, 2002, 10 A.M. EST
Contact: DMS Communications (603) 650-1492

Dartmouth Researchers Propose New Approach to Medicare Reform to Reduce Medical Errors and Provide Better Clinical Care

Hanover, NH -- As policymakers and stakeholders continue the debate on Medicare reform, Dartmouth researchers today confirmed serious defects in the quality of care now provided in the fee-for-service Medicare system, and proposed a national demonstration project to show how health care organizations can improve the quality of care they deliver. Improving the quality of care could lead to tremendous savings for Medicare by reducing spending on unnecessary or unwanted health care.

Their study, published today online in Health Affairs, proposes a model of connecting willing health care organizations with government agencies that will provide appropriate incentives to help the providers improve the care they give. Health care organizations that enroll in the "Comprehensive Centers of Excellence" demonstration project are expected to accomplish four goals: provide better clinical care; reduce the number of medical errors; eliminate the overuse of medical procedures and treatments; and address the underuse of effective care, such as colon cancer screening.

"It is a myth that more Medicare spending means better health, or longer life expectancy, and yet our Medicare system has been operating based on this myth for a long time," said lead author John E. Wennberg, MD, MPH, Peggy Y. Thomson Professor for Evaluative Clinical Sciences at Dartmouth Medical School.

The study suggests that huge savings for Medicare are possible - up to $40 billion - if regions in the United States receiving higher per capita amounts of Medicare dollars are brought down to the benchmark provided by efficient regions. In theory, Wennberg says that this could be done without harm because the findings show that lower spending does not mean less effective care or poor health outcomes.

"If unwanted, unnecessary health care is reduced and quality is improved, that $40 billion could help fund a prescription drug program," Wennberg says. "Given the current economic reality of federal and state budget deficits and estimates of lower long-term surpluses, as well as rising health costs, learning how to improve efficiency may be the best way to find the resources to fund new programs."

The authors' recommendations are based on years of examining the variations in Medicare spending and disparities in clinical practice in the United States. The model centers have the support of several members of Congress, including US Senator James Jeffords (I-VT), who recently introduced legislation to establish the Comprehensive Centers of Excellence. Jeffords noted they are "an approach to Medicare reform that includes preventing and reducing morbidity, saving lives and saving money - goals we can all support."

The study, which is based on findings from the Dartmouth Atlas Project, documents that Medicare spending varies widely according to where seniors live, even after correcting for differences in age, sex, race, pricing differences and health status. For example, the difference in lifetime Medicare spending between typical 65-year-olds in Miami and Minneapolis is more than $50,000. In 1996, the average annual bill for traditional fee-for-service Medicare in Miami was $8,414, more than twice the $3,341 spent in Minneapolis.

"For all the money being spent on them, are 65-year-olds in Miami getting better treatments, or doing better than Minneapolis patients?" Wennberg asked. "The answer is no. This was true 15 years ago, it was true in 1996, and I guarantee, unless we change the system, it will continue to be true in the future."

These unwarranted variations are associated with three major factors:

According to the proposal, medical care organizations participating in the demonstration project would be expected to increase the use of effective care and decrease medical errors, give patients decision-making power, and reduce waste and improve efficiency by rationalizing the use of supply-sensitive care. The paper recommends that these tactics could be accomplished through the establishment of model demonstration centers that would implement Medicare reform on the local level, including the development of a novel reimbursement plan for fee-for-service care that directly awards quality improvement.

Wennberg is the director of the Center for the Evaluative Clinical Sciences at Dartmouth Medical School, a multidisciplinary group of researchers - epidemiologists, economists, clinicians, statisticians, sociologists and others - investigating a variety of issues related to medical care and its outcomes. Wennberg's co-authors are Elliott S. Fisher, MD, MPH, and Jonathan S. Skinner, PhD. Study data came from the Dartmouth Atlas of Health Care, available in part at

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research. Wennberg's paper is available online at Responses from U.S. Senators James Jeffords and Max Baucus, U.S. Representative Nancy Johnson, Robert Nesse and Karen Wolk Feinstein, are also available on the Web site.

For more information, contact Carol Schadelbauer at (301) 652-1558 or John Wennberg at (603) 650-1268.