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Lower Poverty Rates Result In Lower Healthcare Costs

The favorite sound bite of Dartmouth disciples is to compare some high cost locale with a low cost locale. First it was Miami vs. Mayo, then Birmingham vs. Grand Junction, then Los Angeles vs. Green Bay and now it’s Los Angeles vs. Portland. This time, Tom Brokaw delivered the message on Meet the Press: “At UCLA Medical Center, they spend $92,000 on the last two years of a life, but in Portland, Oregon, just north of there (it’s actually 825 miles north of there), they spend $52,000 because they’ve got better controls on Medicare.  So until you begin to pay for value and pay for performance, health care reform is not going to work.”

What do Miami, Birmingham and Los Angeles have in common, and what do Rochester MN (home of Mayo), Grand Junction CO, Green Bay WI and Portland OR have in common. One thing is poverty. The maps below show the density of poverty in each (light green shows census tracks with 20-40% poverty and red shows tracks with >40% poverty).
Miami, Los Angeles and Birmingham all have poverty ghettos. There certainly is poverty in the other cities, but not in ghettos. The dense poverty ghetto in central Los Angeles includes more than 2 million poor people.

So is it “better controls” or less poverty that results in lower spending. The first has a certain appeal, and we do seek better ways of doing things, but the latter is what’s really driving spending higher, and nowhere more vividly that in Los Angeles. Poverty is expensive, and ghetto poverty is really expensive. To paraphrase Mr. Brokaw, until you begin to solve the problem of poverty, health care reform is not going to work.

*This blog post was originally published at PHYSICIANS and HEALTH CARE REFORM Commentaries and Controversies*


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