Blog on the Run: Reloaded

Friday, May 29, 2009 9:25 pm

Why health care costs are so high … and will be hard to bring down

Atul Gawande is a Boston-based doctor who writes frequently about medical issues for The New Yorker. He has a piece in this week’s issue that, in examining what might be done to rein in health-care costs, starts with an excellent question: Why are per-capita Medicare costs (frequently used as an indicator for overall medical costs) in McAllen, Texas, so much higher than in the rest of the country, or even in comparable parts of Texas, such as El Paso?

Some of the things he learned:

  • It’s not that McAllen’s population is so much unhealthier than anywhere else’s.
  • The quality of facilities and overall quality of care aren’t markedly better in McAllen than in El Paso.
  • It’s not the cost of malpractice suits.

One thing he found is that there is simply more medicine, particularly of the more expensive type, practiced in McAllen than elsewhere.

Moreover, “[Dartmouth researcher Elliott] Fisher found that patients in high-cost areas were actually less likely to receive low-cost preventive services, such as flu and pneumonia vaccines, faced longer waits at doctor and emergency-room visits, and were less likely to have a primary-care physician. They got more of the stuff that cost more, but not more of what they needed.”

“Physicians in places like McAllen behave differently from others,” Gawande wrote. “The $2.4-trillion question” — that’s about what the U.S. spends annually on health care — ” is why. Unless we figure it out, health reform will fail.”

Gawande finds that, relative to a lot of other communities, physicians have worked hard to develop new revenue streams (e.g., investing in private, for-profit hospitals to which they refer patients):

About fifteen years ago, it seems, something began to change in McAllen. A few leaders of local institutions took profit growth to be a legitimate ethic in the practice of medicine. Not all the doctors accepted this. But they failed to discourage those who did. So here, along the banks of the Rio Grande, in the Square Dance Capital of the World, a medical community came to treat patients the way subprime-mortgage lenders treated home buyers: as profit centers.

The purest opposition to this approach might be at Minnesota’s Mayo Clinic:

… decades ago Mayo recognized that the first thing it needed to do was eliminate the financial barriers [to better health care]. It pooled all the money the doctors and the hospital system received and began paying everyone a salary, so that the doctors’ goal in patient care couldn’t be increasing their income. Mayo promoted leaders who focussed first on what was best for patients, and then on how to make this financially possible.

No one there actually intends to do fewer expensive scans and procedures than is done elsewhere in the country. The aim is to raise quality and to help doctors and other staff members work as a team. But, almost by happenstance, the result has been lower costs.

Entire medical communities, such as that of Grand Junction, Colo., have adopted similar approaches (adapted to their own local needs) and achieved similar results. The lesson, Gawande says is that you need not just more efficient and effective treatments but better entire systems of care. “The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care,” he writes. “Otherwise, you get a system that has no brakes. You get McAllen.”

(He also says, “These are empirical, not ideological, questions.” Bless him, but dollars to doughnuts, that won’t stop politicians and lobbyists from treating them as ideological questions.)

We have little time to make changes, we have to make the right changes, and arguing about cost and accessibility of coverage, although important, may be missing an even more important, urgent and dangerous point: even some of the more efficient community systems may be evolving toward the McAllen model:

In El Paso, the for-profit health-care executive told me, a few leading physicians recently followed McAllen’s lead and opened their own centers for surgery and imaging. When I was in Tulsa a few months ago, a fellow-surgeon explained how he had made up for lost revenue by shifting his operations for well-insured patients to a specialty hospital that he partially owned while keeping his poor and uninsured patients at a nonprofit hospital in town. Even in Grand Junction, Michael Pramenko told me, “some of the doctors are beginning to complain about ‘leaving money on the table.’ ”

As America struggles to extend health-care coverage while curbing health-care costs, we face a decision that is more important than whether we have a public-insurance option, more important than whether we will have a single-payer system in the long run or a mixture of public and private insurance, as we do now. The decision is whether we are going to reward the leaders who are trying to build a new generation of Mayos and Grand Junctions. If we don’t, McAllen won’t be an outlier. It will be our future.

Go read the whole thing.


  1. Bravo, bravo! Finally, someone is addressing what we are getting for our dollars rather than just the number of dollars spent on health care! As someone who was made disabled by U.S. doctors who did little more than order tests and refer me to other doctors who did the same, I’ve tried relentlessly to bring this same issue to the forefront. With no bank roll to back up my words, I was inevitably ignored.

    What gets to me most is that the U.S. government has proof of the inadequacies of our health care system in every disability application, and yet does nothing. That my insurance and doctors failed me came to light when the Social Security Administration found me to be disabled with severe degenerative disc disease caused by an untreated bacterial infection, actinomycosis.

    U.S. taxpayers, who are funding my disability and eventual Medicare coverage as well as that of tens of thousands made disabled by doctors who didn’t have time to read and analyze test results, should be up in arms! Our health care executives are reaping major profits while disabling America’s population and our taxpayers are picking up the tab to support the disabled in their last agonizing years of life.

    The U.S. government should enact and enforce laws not only to prevent such outlandish huberis, but also to obtain funds to cover SSDI costs.

    Having read “Better” and “Complications” by Gawande, I am fan.(I wish there was some way that I could contact him because I still need surgery to remove an ileocecal mass causing a partial obstruction, but I can’t find a surgeon who will talk to me without a doctor’s referral and I can’t find a doctor willing to learn about actinomycosis, the bacterial infection that caused the mass. Any ideas?)

    Comment by doctorblue — Saturday, May 30, 2009 7:31 pm @ 7:31 pm

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