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KAI RYSSDAL: Yesterday was the deadline for seniors to enroll in the new Medicare drug benefit. But as many predicted, the penalties for later registration might be going away. There was a bill being written in the Senate today to waive those extra premiums. No matter who pays, healthcare for many seniors is expensive. There's some new research today from Dartmouth Medical School suggesting one reason why. It reckons almost a third of the cash Medicare spends on the chronically sick isn't put to good use. From the Marketplace Health Desk at WGBH, Helen Palmer has that story.

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HELEN PALMER: Dartmouth's Dr. John Wennberg says Medicare patients who'd suffered heart attacks or hip fractures died sooner when they had more medical care.

JOHN WENNBERG: So the question then becomes, Is more better?. And that's where the evidence we've been looking at seems to say it's not.

Wennberg says in regions with plenty of doctors and hospital beds patients have more office visits, more tests, and more days in the hospital.

WENNBERG: What really determines the relative intensity of care is the numbers of hospital beds, and indeed the number of physicians that are available in a particular market area.

Medicare pays for each procedure -- each test or visit costs. That way of paying helps explain these results, says Emory University's Ken Thorpe.

KEN THORPE: The payment system drives the results and the results are poorer quality care at high cost.

Thorpe says rethinking the payment structure could give better outcomes. But some hospital systems manage to deliver high quality care at low cost. Wennberg says Salt Lake City's Intermountain Health Care is one of the best. So how do they do it?

BRENT JAMES: You do all the right things but only the right things. It's based on team work.

Medical research chief, Brent James. Nurses, doctors, pharmacists — they're all part of the team — and so is the patient. James says it's working for his own father.

JAMES: The first person to manage his congestive heart failure is my father. We trained him.

James says putting the patient in charge really pays off. And Wennberg reckons if all sick Medicare patients were managed as well as that, it could save the system $40 billion a year.
In Boston, I'm Helen Palmer for Marketplace.