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Health care as a “market good”? Appendicitis as a case study

The dramatic variation of health care costs across the United States was one of the important factors behind the U.S. Patient Protection and Affordable Care Act, passed by the U.S. Congress and signed by President Obama in 2010. Moreover, research programs such as the Dartmouth Atlas of Health Care project have documented how higher costs do not necessarily result in better patient outcomes.

A 2012 study from the University of California, San Francisco, published in the Archives of Internal Medicine, “Health Care as a ‘Market Good’? Appendicitis as a Case Study,” analyzed 2009 data from 19,368 adult patients treated for appendicitis in California hospitals. To ensure valid comparisons, the researchers examined “only uncomplicated episodes of acute appendicitis” that involved “visits for patients 18 to 59 years old with hospitalization that lasted fewer than four days with routine discharges to home.”

The study’s findings include:

  • The lowest charge for removal of an appendix was $1,529, while the highest was $182,955. The median was $33,611.
  • Treatments for Medicaid patients were associated with a 2.3% cost increase; for uninsured patients, related costs were 1.4% higher than the median.
  • The median charge for the procedure at a county hospital was 36.6% lower than at nonprofit hospitals; costs at for-profit hospitals were 16.3% higher.
  • Even within the county with the lowest range of charges, Fresno, the highest and lowest costs varied by $46,204, suggesting that geography does not fully explain the dramatic variations.

The researchers conclude: “Our first result of the median charge for treating ‘uncomplicated’ appendicitis of $33, 611 would certainly startle many patients. Given estimates that 60% of bankruptcies in the United States involve catastrophic medical expenses, these data should alarm those making decisions about our society’s ability to obtain medical care without financial catastrophe.”

Tags: medicine, health care reform, Obamacare

    Writer: | Last updated: April 24, 2012

    Citation: Hsia, Renee Y.; Kothari, Abbas H.; Srebotnjak, Tanja; Maselli, Judy. "Health Care as a 'Market Good'? Appendicitis as a Case Study," Archives of Internal Medicine, 2012, Vol. 172, No. 10, 818-819, doi: 10.1001/archinternmed.2012.1173.

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    Newswriting and digital reporting assignments

    1. Write a lead, headline or nut graph based on the study.
    2. Spend 60 minutes exploring the issue by accessing sources of information other than the study. Write a lead (or headline or nut graph) based on the study but informed by the new information. Does the new information significantly change what one would write based on the study alone?
    3. Compose two Twitter messages of 140 characters or fewer accurately conveying the study’s findings to a general audience. Make sure to use appropriate hashtags.
    4. Choose several key quotations from the study and show how they would be set up and used in a brief blog post.
    5. Map out the structure for a 60-second video segment about the study. What combination of study findings and visual aids could be used?
    6. Find pictures and graphics that might run with a story about the study. If appropriate, also find two related videos to embed in an online posting. Be sure to evaluate the credibility and appropriateness of any materials you would aggregate and repurpose.

    Class discussion questions

    1. What is the study’s most important finding?
    2. Would members of the public intuitively understand the study’s findings? If not, what would be the most effective way to relate them?
    3. What kinds of knowledgeable sources you would interview to report the study in context?
    4. How could the study be “localized” and shown to have community implications?
    5. How might the study be explained through the stories of representative individuals? What kinds of people might a reporter feature to make such a story about the study come alive?
    6. What sorts of stories might be generated out of secondary information or ideas discussed in the study?

    Study analysis

    Read the study titled “Health Care as a ‘Market Good’? Appendicitis as a Case Study.”

    1. What are the study's key technical term(s)? Which ones need to be put into language a lay audience can understand?
    2. Do the study’s authors put the research into context and show how they are advancing the state of knowledge about the subject? If so, what did the previous research indicate?
    3. What is the study’s research method? If there are statistical results, how did the scholars arrive at them?
    4. Evaluate the study's limitations. (For example, are there weaknesses in the study's data or research design?)
    5. How could the findings be misreported or misinterpreted by a reporter? In other words, what are the difficulties in conveying the data accurately? Give an example of a faulty headline or story lead.

    Read the issue-related The New Yorker article titled "The Cost Conundrum."

    1. What key insights from the article and the study should reporters be aware of as they cover health care cost issues?