The United States spent $2 trillion on health care in 2005, or 16 percent of our gross domestic product (GDP). By 2016, the Centers for Medicare and Medicaid Services (CMS) pro-jects healthcare spending to exceed $4 trillion, or 19.6 percent of GDP. To place these figures in context, the United States spent four times more on health care in 2005 than it did on education ($536 billion spent on education for grades K through 12).

For years, the U.S. healthcare system has operated on the theory that spending more on health care equals better patient outcomes. However, this proposition is being challenged as researchers analyze the discrepant rates of spending across the country.

Geographic variations in care
John E. Wennberg, MD, MPH, first began examining healthcare variations using a system of small area analysis, dividing up the country into discrete hospital referral areas. After controlling for sex, age, race, socio-economic factors, and comorbidities, he could compare different regions to determine the relationship between spending and health outcomes. His findings shocked many: Higher expenditures did not equate with better outcomes. In fact, regions that tended to spend the most had some of the worst outcomes.

The Dartmouth Atlas of Health Care by Dr. Wennberg, first published in 1996, takes a critical look at the geography of health care and the ramifications of healthcare variations. Among its tenets is the belief that, supply, rather than demand, drives resource utilization in our current healthcare system. On average, high-cost regions boast 32 percent more hospital beds, 31 percent more physicians, 65 percent more medical specialists, 75 percent more general internists, and 29 percent more surgeons than low-cost regions when controlled for regional population size differences. Yet, even after controlling for patient factors such as comorbidities, higher cost regions have higher mortality rates and report less patient satisfaction with care.

Variations in orthopaedic care
Variations in orthopaedic care patterns also exist. During the first six months following hip fractures, patients at teaching hospitals in high-spending regions received 82 percent more physician visits, 26 percent more imaging exams, 90 percent more diagnostic tests, and 46 percent more minor surgeries than patients at teaching hospitals in low-spending regions—without noticeable benefits.

The discrepancies are even larger in lumbar spine surgery. In 2002-2003, there was nearly an eight-fold variation in population-based rates of lumbar disk surgery and a 20-fold variation in population-based rates of lumbar fusion among Medicare enrollees. This is the largest coefficient of variation within any surgical procedure (Fig. 1).

Addressing such discrepancies in care may require challenging the deeply ingrained American notion that “more is better.” Determining the appropriate amount of care will require closer observation and analysis of the regions with the best outcomes. The most efficient healthcare centers should be used as benchmarks for measuring appropriate practice patterns of supply-sensitive care. Additionally, randomized trials such as the Spine Patient Outcomes Research Trial (SPORT), funded by the National Institutes of Health, are essential to examine areas of care with highest variation (See “No easy answer” in May AAOS Now). These trials provide insight into select populations that may benefit most from these highly variable procedures and help to standardize rates across the nation. By observing practice variations, and adopting the most effective practice patterns, we may be able to slow the ever-increasing healthcare expenditures, without compromising the quality of patient care delivered.

The Washington Health Policy Fellows include Aaron Covey, MD; Samir Mehta, MD; Sharat K. Kusuma, MD; Alok D. Sharan, MD; James W. Genuario, MD; Ryan M. Nunley, MD; Anil Ranawat, MD; John Flint, MD; and Alex Jahangir, MD. References for this article can be found online at www.aaos.org/now

Did you know?

• $2 trillion: Total U.S. healthcare expenditures in 2005
• $24.09 trillion: The total U.S. budget revenue in 2005
• $4 trillion: Expected total U.S. healthcare expenditures in 2016
• 500%: The rate of increase in spending on lumbar fusion surgery from 1992 to 2003 ($75 million to $482 million, respectively)
• 10 times: The greater likelihood that a Medicare patient in a high-utilization area will receive a total hip arthroplasty or a total knee arthroplasty than a similar patient in a low-utilization region