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MICHELE NORRIS, host:

Elliot Fisher is with the Dartmouth Institute for Health Policy and Clinical Practice. And it's research from Dartmouth that's influencing the administration's sense of best practices in health care. Dr. Fisher joins me now. Welcome to the program.

Dr. ELLIOT FISHER (Dartmouth Institute for Health Policy and Clinical Practice): Oh, wonderful to be here.

NORRIS: The president is talking about high quality care at below average cost. That's what we heard today. Now, you've compared the cost and the outcomes of health care around the country. What is it that Green Bay, and other places like it, seem to be getting right?

Dr. FISHER: Well, they're certainly spending a lot less money, and they are providing care that is equal or better than the care provided in many other communities around the country.

NORRIS: How do they do it?

Dr. FISHER: Well, we think there are probably - there are three pieces of this. First, they really think about their work as a system. They think and work as a system. The second thing is they focus on improving quality and reducing costs, and they use data to track their performance. They try to provide insight into what they're doing, using measures of quality and trying to reduce total costs.

NORRIS: Doctor, there seems to be this sort of inverse relationship between quality and cost in the American health care system. And I'm interested in some of the work that you do in the Dartmouth Institute. You seem to have found that in some communities, where the quality of health care and of health outcomes are lowest, is where Medicare, for instance, is spending the most money. How does that happen?

Dr. FISHER: Well, why isn't more better? First, it often is. You know, there are certain treatments, like when you're having a heart attack, you want to get immediate and high quality care. And there are many high cost places that provide very high quality care for specific evidence-based conditions.

One of the biggest differences between high-cost regions and low-cost regions is in the proportion of patients seeing 10 or more different physicians during a particular bout of illness. And in Green Bay, the average patient with a serious illness will be half as likely to have 10 or more physicians involved in their care. When you got multiple physicians involved in a patient's care it's much harder to coordinate that care to be sure who is responsible, who's steering the ship. So it's much easier for mistakes to occur.

And, of course, if patients are being cared for in the hospital, when they could be safely cared for at home, we know that hospitals are dangerous places to be. So there's very little relationship between the overall quality of care and the overall cost of care. And, on average, the effect is slightly negative, that is, spending more is associated with slightly worse quality and outcomes.

NORRIS: I just want to understand something, because one of the things that really drives up health care cost is the overuse of medical care. How does that happen?

Dr. FISHER: A couple of ways. First, we have a payment system that works by paying physicians for each service they provide and paying hospitals for each service they provide. Hospitals often feel that they have to compete with the neighboring hospital on almost every service. So we have in many communities a medical arms race.

Physicians have to pay their office practice expenses. They have to pay the nurses and technicians who work in their offices. The only way they can do that is by seeing patients or by ordering tests and services that are reimbursed by the payers. So with this system that rewards more services, it's very hard for hospitals or physicians to step back and say, well, what's - how do we provide the best possible care at the lowest possible cost?

NORRIS: Maybe you could paint a picture for us. And if a patient presented with a certain set of symptoms in Green Bay - where they're very good at patrolling costs and perhaps another community where they're not so good at doing this -help us understand the difference in the kind of care that they might receive. Let's say that someone comes to a health care facility and it appears that they're suffering from pneumonia.

Dr. FISHER: Well, in some communities, the physician might evaluate them carefully, see that they are relatively low risk, give them some initial medications and make sure that they stay in touch with them to see that they can be safely managed at home. In other communities, especially if the patient showed up in a physician's office, they might simply say, I don't have time to evaluate you, let me send you to the emergency room. The emergency room physician would say, we don't really have time. Yes, it looks like you have pneumonia, we'd better admit you to the hospital.

So the biggest differences we see are in, you know, patients who could safely be managed outside the hospital, but the physicians and the delivery system are not oriented to help them stay safely outside the hospital.

NORRIS: If we change the way that we pay doctors in this country, would that have an immediate impact on health care cost? Would that bring cost down?

Dr. FISHER: I think it could have a very big impact, especially if we helped physicians come together to work as teams with the hospital in their community or as a large multispecialty group practice. Then we could really allow physicians to have the time to spend with patients that would allow them to care for them without having to worry about billing for each specific service. But it's a more fundamental change in the way both hospitals and physicians are paid, that would reward organized systems for providing better care at a lower cost.

NORRIS: Elliot Fisher is the director for Population Health and Policy at the Dartmouth Institute for Health Policy and Clinical Practice. Doctor, thank you very much for being with us.

Dr. FISHER: It was a treat. Thank you very much.

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