Inconvenient truths about supplier induced demand and unwarranted variation in medical practice

BMJ 2009; 339 doi: (Published 20 October 2009) Cite this as: BMJ 2009;339:b4073
  1. Albert G Mulley, chief12
  1. 1General Medicine Division, Massachusetts General Hospital, 50 Staniford Street, Boston, MA 02114, USA
  2. 2Harvard Medical School, Boston, MA
  1. amulley{at}

    Doctors need to confront the implications of variation in clinical practice and improve the quality of medical decision making

    The United States spends 17% of its gross domestic product on health care, the highest of any country, yet does not produce measurably better health. The per capita spending in 2006 for the government Medicare programme for people aged 65 ranged from $5310 to $16 352 in the country’s 306 hospital referral regions, and rigorous analyses suggest that one dollar is wasted for every two that are well spent.1 2 3 Is such variation, and the implied overuse of care in some regions, the result of America’s heavy reliance on market mechanisms and resulting supplier induced demand for services or are there more general lessons for all healthcare economies about the quality of medical decisions?

    Practice variation and the complexity of medical decisions

    The first systematic account of practice variation was Glover’s 1938 report on the incidence of tonsillectomy among schoolchildren in England and Wales.4 He found a tenfold variation in tonsillectomy rates from one region to another. Although he did not comment on the economic consequences of this variation, he did observe that for every death caused by complications attributable to enlarged tonsils there were at least eight deaths caused by tonsillectomy. Economics aside, there was a clear ethical imperative to question and confront practice variation.

    Decades after Glover’s report, regional variations in tonsillectomy and other surgical procedures were rediscovered in the United States (figure).1 2 5 Wennberg and colleagues showed that, although the incidences of their studied surgical procedures often varied between countries, the degree of variation within countries for each procedure was similar. Furthermore, the degree of variation was associated with the level of uncertainty about the probabilities of surgical outcomes.5

    Rates of common surgical procedures among Medicare patients for 306 …

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