@ossobuco,
Perhaps this has been sited before. The article made me think things are more complicated than this, or, then, that.
http://www.newyorker.com/online/blogs/newsdesk/2009/06/atul-gawande-the-cost-conundrum-redux.html
Alas, it's not easy to read if you don't subscribe (grrrrrr.)
Abstract -
JUNE 23, 2009
ATUL GAWANDE: THE COST CONUNDRUM REDUX
In my June 1st article, “The Cost Conundrum,” I explored the question of why two border towns in Texas of similar size, location, and circumstances"McAllen and El Paso"should cost Medicare such enormously different amounts of money. In 2006, McAllen cost $14,946 per enrollee, which is the second-highest in the United States and essentially double El Paso’s cost of $7,504 per enrollee. Analysis of Medicare data by the Dartmouth Atlas project shows the difference is due to marked differences in the amount of care ordered for patients"patients in McAllen receive vastly more diagnostic tests, hospital admissions, operations, specialist visits, and home nursing care than in El Paso. But quality of care in McAllen is not appreciably better, and by some measures, it is worse. Indeed, studies have shown that the care for patients in the highest-cost regions of the country tends to go this way"with more high-cost care across the board, but less low-cost preventive services and primary care, and equal or worse survival, functional ability, and satisfaction with care. The cause that I found locally was a system of care that was highly fragmented for patients and often driven to maximize revenues over patient needs. And I pointed to positive outliers across the country, including Grand Junction, Colorado, and the Mayo Clinic that deliver markedly lower-cost, higher-quality care.
The depth of response the piece received has been orders of magnitude greater than I anticipated. The most gratifying for me has been the overwhelming volume of supportive letters, e-mails, and blog postings from fellow physicians, nurses, and other clinicians who felt that it captured the difficulties they’ve had struggling against a system that pushes them for quantity over quality and fragments care in ways that are costly and dangerous to patients.
But there have also been a few skeptics, who claim, in essence, that the costs of care in McAllen are what they should be for good medicine. They raise three major objections to the article’s findings.
What about McAllen’s many “Winter Texans”"retirees who live elsewhere but come for the warm weather in the winter and inflate the local costs of care? But in the Dartmouth Atlas, the Medicare costs for an enrollee are counted against their permanent place of residence. The cost of these “snowbirds” are excluded for McAllen.
The real culprit is medical malpractice. McAllen is a “judicial hellhole” and doctors are practicing defensive medicine, ordering unnecessary tests to protect themselves against lawsuits, and that is driving the difference. Yet El Paso and McAllen function under the same Texas malpractice laws that capped malpractice awards in 2003. As doctors there noted to me, premiums have gone down substantially, reflecting the major drop in lawsuits. And even if McAllen doctors were especially fearful of lawsuits, it is hard to imagine that “defensive medicine” would lead to McAllen’s vastly greater number of pacemaker insertions, knee replacements, carotid operations, coronary artery stents, or home-nursing visits. Certainly the doctors I spoke to there did not think lawsuit fears affect their decisions for surgical therapies and other such interventions.
McAllen is three times poorer and unhealthier"and has legions more illegal immigrants"than low-cost, well-served communities like Grand Junction, Colorado. That’s why the comparison in health-care delivery was between McAllen and El Paso. The purpose of discussing these places was to understand what medical communities that have low-cost and high-quality care do differently. They find ways to blunt financial incentives that drive unnecessary care, ways for clinicians to collaborate much more effectively for patients, and ways for the organization to accept accountability for improving the overall results of both outpatient and inpatient care. There are, in fact, examples of exactly this in Texas itself. Scott and White Memorial Hospital has brought Temple, Texas, higher Medicare quality scores than McAllen hospitals, higher patient satisfaction, and the lowest costs in the state ($7,015 per enrollee) by building an accountable care organization that we could learn a great deal from.
As I noted in the piece, McAllen is indeed in the poorest county in the country (Hidalgo County), with a relatively unhealthy population and the problems of being a border city. They have a very low physician supply. The struggles the people and medical community face there are huge. But they are just as huge in El Paso"its residents are barely less poor or unhealthy or under-supplied with physicians than McAllen, and certainly not enough so to account for the enormous cost differences. The population in McAllen also has more hospital beds than four out of five American cities. Here are a few salient facts for comparison [note: the following tables have been reformatted so readers can access source information]:
McAllen El Paso
City median household income, 2007 $39,727 $35,646
Poverty rate, 2007 27.3% 27.4%
Hispanic population 80.3% 76.6%
Hidalgo County El Paso County Texas
Per capita income rank by county 2007 #1 poorest in U.S. #6 poorest in U.S.
Per capita income, county, 2007 $30,295 $34,980
Unemployment, 2006 7.4% 6.7%
Unemployment, 2008 7.3% 6.3%
Deaths from Cardiovascular Disease, Rate per 100,000 251.7 235.3 299.1
Asthma rates among adults 2001-2006 5.3 5.2 6.9
Cases of AIDS/Rate per 100,000 9.8 12.5 7.4
Infant Deaths/Rate per 1,000 3.9 4.0 6.3
Cancer Incidence, Rate per 100,000 2001-2005 516.6 420.1 542.0
McAllen Hospital Referral Region El Paso Hospital Referral Region
Physician supply, # per 100,000 (rank) 114 (#1 worst) 144 (#10 worst)
Hospital beds, # per 100,000 (percentile rank) 3.2 (83rd percentile) 2.3 (42nd percentile)
(A jpeg image of the tables is also available online.)
By any measure, McAllen’s poverty and poor health fails to account for its differences from El Paso. St. Louis is just as poor as McAllen (it is ranked the third-poorest county or independent city in the U.S.). Its cost per Medicare enrollee? $8,306. Poverty and poor health are grievous problems for many communities. But in addressing these problems, they don’t spend twice the national average on health care, while achieving no better results than similar communities.
One last point worth remembering here: McAllen’s spending was almost identical to El Paso’s in the early nineteen-nineties. By the late nineties, however, it had become one of the most expensive regions in the country for Medicare and it has continued that way. Yet, public data show no sudden decline in health status or income for the McAllen population.
The biggest changes? A dramatic rate of overutilization during a period that saw a marked expansion in physician-owned imaging centers, surgery centers, hospital facilities, and physician-revenue-sharing by home-health agencies. Home-health agencies there, for example, spent more than $3,500 per Medicare beneficiary"not only five times more than in El Paso, but also more than half what many communities spend on all patient care. In the end, none of the criticisms address either the pattern of overtreatment found in multiple studies of high-cost communities or the specific instances I found of revenue-driven care among doctors and executives in McAllen.
One methodological question is whether Medicare spending patterns differ from private-insurance spending patterns. There are indeed differences, because the prices Medicare pays doctors, hospitals, and others for services are not the same as the prices that private insurance pays. But, as a series of Dartmouth studies have shown, when it comes to how many services are provided per patient, the utilization patterns for the over-65 Medicare population are similar to those in the under-65 population.
As we look across the enormous differences in health-care spending in our country, what we are witnessing are enormous differences in the way medicine is practiced. There are lessons to be learned from examining what the positive outliers do differently to prevent themselves from going McAllen’s way. Studying what they have accomplished, and changing the financial incentives in our system to replicate it, could make care far better for patients in McAllen. Indeed, it could make care far better for patients across the country.
