Gawande Nails It on Healthcare Costs

[Joanne98]

I just finished reading Atul Gawande’s June 1st New Yorker piece – it's the Talk of the Health Policy Town – on healthcare’s “Cost Conundrum.” Like most of Atul’s work, the article is lyrical, powerful, insightful, and correct.

As you’ve probably heard, Gawande profiles the town of McAllen, Texas, whose healthcare costs are nearly double the national average. He swats away the usual explanations (our patients are sicker, more obese, more addicted, more Mexican; our lawyers are nastier; our quality is better…) to unblinkingly zoom in on the real culprit: a culture in which providers’ greed trumps the patients’ interests. He contrasts McAllen's healthcare culture with that of El Paso, just 800 miles up the border, a town with similar demographics but whose healthcare costs are exactly half as high. He also describes the Mayo Clinic, which manages to deliver the best healthcare in the country, perhaps the world, at a fraction of McAllen’s costs.

His main point is that policymakers need to focus less on who pays (i.e., should there be a “public plan”?) and more on creating physician-led accountable entities that manage the dollars and possess the wherewithal and incentives to make rational choices about how to organize care – the ratio of primary care docs to specialists, the number of MRI scanners, the algorithm for the workup of chest pain or gallstones. Atul understands that we can’t snap our fingers and change culture, but that culture will change when structure and incentives are lined up correctly.

The article is both hopeful and depressing. Hopeful because it says that in order to save healthcare costs from bankrupting America, we don’t need to look to Germany, or Denmark, or Canada for inspiration – the models for how to deliver high quality care at a survivable cost are already here, in the good ole’ U.S. of A. We simply need to create a policy landscape that either forces McAllen’s providers and healthcare organizations to become more like El Paso’s (or better yet, Mayo’s) or makes their businesses unviable if they don’t.

Depressing, because in the absence of vigorous federal action, the docs and administrators in El Paso are more likely to start behaving like those in McAllen than the converse. Why? If the healthcare pie begins to shrink, we can expect physicians and communities that have been less profligate to become more entrepreneurial (“why am I being so careful while those other guys reap all the profits?”), not more circumspect.

Continued>>>
http://www.thehealthcareblog.com/the_health_care_blog/2009/06/gawande-nails-it-on-healthcare-costs-.html

[Cleita]

1. It could be that McAllen also has an unusually high number of elderly

retirees who will probably die there. It means that the cost of their health care will be much higher in the last year of their life than in previous years. El Paso has a population like most cities of a mixture of young and old. I don't think there is a real comparison there until those factors are taken into consideration.