According to Jeffrey Brenner of Camden Coalition Hotspotting fame, it is. He told the Freakonomics Podcast that “you better worry if you go to one of those emergency rooms, because the chances of being admitted to the hospital when there are empty beds upstairs that they need to fill are going to be much, much higher than when all the beds are full–whether there’s medical necessity or you need it or not.”

The Dartmouth Atlas Project (DAP) agrees and refers to the phenomenon as “Supply Sensitive Care”. In their project topic brief they offer a detailed definition of the term, but I prefer this more succinct version from Austin Frakt on the Incidental Economist:

“Supply sensitive care” is health care delivered at a volume that responds to availability of provider supply and in ways that cannot be explained by other factors like the health of the patient population.

The DAP brief cites a lack of evidence-based guidelines as a driving factor. They argue that the medical textbooks are thin on best practices for scheduling return visits, hospital/intensive care admissions, referral to specialists and even when to order certain diagnostics or imaging tests when it comes to chronic conditions like cancer, chronic lung disease or heart failure. Combine that with a common healthcare attitude of “more is better” and the DAP report says we shouldn’t be surprised when the supply of resources seems to govern their use.

The DAP report supports its claims with several illustrations. The one that really stands out (and was also referenced in the Frakt post) shows a comparison of admissions for hip fractures (green dots) where hospitalization is expected vs. non-surgical cases where the expectation isn’t as clear cut (blue dots).

Association between hospital beds per 1,000 (1996) and discharges per 1,000 (1995-96) among Medicare enrollees in 306 hospital referral regions.

For the hip fractures, the hospitalization rates are similar across the country and seem unaffected by the supply of hospital beds. On the other hand “more than half of the variation in hospitalization rates for medical (non-surgical) conditions is associated with bed capacity.”

I’m no economist, but the rest of the charts seemed less meaningful to me (at least for the supply-sensitive care argument). There were certainly some interesting ranges when it came to the number of days spent in hospital towards end of life, but the study didn’t seem to correlate that to supply. Also, the cardiologist visits vs. number of cardiologists seemed to be pretty evenly split above and below the line. Maybe some of you can drop me a comment and explain what I’m missing on those.

I’ll offer an alternative approach, and it’s one that will be beneficial to all of us whether or not supply-sensitive care is legit or not — fix the state-licensing problem and open up telemedicine across all state lines. If you combine better guidance with alternative payment models AND offer an alternative way to use excess capacity more productively, then you’ll most likely stamp out any potential misuse of “supply-sensitive care”. In addition, you’ll give us a powerful tool in dealing with the coming doctor shortage (and probably save a ton of money).

Discussion Details

Wednesday, April 13, 2016

12:00 PM EST – #hcbiz Tweet Chat
Follow the #hcbiz hashtag on Twitter or use an app like to join the conversation.

12:30 PM EST – Blab
Don Lee will continue the conversation with Shahid Shah and special guests with a 30–60 minute video chat on Blab (subscribe here).

Discussion Topics

Q1: Do you believe that supply-sensitive care is a widespread problem (excess capacity leads to unnecessary care)?

Q2: What measures are being taken (or should be) to improve evidence-based guidance for treating patients with chronic conditions?

Q3: Would telemedicine mitigate the risks of supply-sensitive care? What other steps can we take?

Further Reading/Listening

Here’s the Freakonomics podcast with Jeffrey Brenner — worth a listen.

Check out The Incidental Economist blog. There’s a ton of good info there with a high-volume of quick reads. I got lost in there for a while and will certainly be a return customer. In addition to the post I mentioned above, check out Physician behavior and demand inducement and Supplier-induced demand vs. supply-sensitive care to better understand some of the economic theory. Then just tool around for a bit. I promise you’ll find something that interests you.

Finally, here’s a direct link to the blab. Subscribe now! These are starting to get really good.