The U.S. Health System Works Best Where It's Not Practiced As Just Another Business (Joe Rothstein's Commentary)

June 12, 2009

By Joe Rothstein
Editor, EINNEWS.COM

McAllen, Texas is one of the most expensive health care markets in the U.S. Up the road about 800 miles is El Paso County, with basically the same demographics, but where Medicare spends half as much for each enrollee.

Despite the disparity in spending, by most measures, the people in El Paso get better medical care. Medicare ranks hospitals on 25 separate metrics of performance. On all but two of these, El Paso's hospitals perform better than McAllen's.

How's this possible? How can spending half as much for medical care produce better outcomes? This isn't just an academic question. In 2006 Medicare spent $7,500 per enrollee in El Paso. In McAllen, the cost was $15,000. The difference between McAllen and El Paso, projected over the entire nation, represents trillions of dollars of health care costs. It's the difference of whether the U.S. is going to get its health system under control---or not.

The McAllen/El Paso story is making the rounds these days because of an article in The New Yorker magazine's June 1 edition: “The Cost Conundrum.” The author is a respected surgeon, Atul Gawande, an associate professor at the Harvard Medical School. Dr. Gawande interviewed medical people in McAllen and El Paso, and in many other communities throughout the U.S. trying to ferret out why health costs vary so much, and why higher costs don't necessarily equate to better health care..

It's an article well worth reading. But if you haven't, or won't, I'll summarize his conclusion for you:

You can't leave the health care system to the tender mercies of the commercial marketplace.

McAllen's doctors don't just practice medicine. They are very entrepreneurial about buying high tech equipment and providing many of the services their patients require. In other words, they are much more inclined than El Paso's doctors to have medical profit centers beyond their own one-to-one patient billing.

And the differences in how medicine is practiced are dramatic: Compared with nearby El Paso, in 2005 and 2006 McAllen patients received 20% more abdominal ultrasounds, 30% more bone-density studies, 60% more stress tests, 200% more nerve-conduction studies, 500% more urine-flow studies, and far more gallbladder operations, knee replacements, pacemakers, and coronary stents.

Contrast this with Grand Junction, Colorado, one of the lowest-cost markets in the country---but a community that's achieved some of Medicare's highest quality-of-care scores.

Dr. Gawande found that Grand Junction's doctors have agreed among themselves to a system that pays a similar fee whether the patient is on Medicare, Medicaid or private insurance. They also meet regularly in small peer-review committees to look over patient charts and compare notes. They also share information through electronic records. They practice a community-centric medicine in close coordination with the area's dominant HMO.

Here's how Dr. Gawande describes it: “The leading doctors and hospital system (in Grand Junction)....adopted measures to blunt harmful financial incentives, and took collective responsibility for improving the sum total of patient care.

"This approach has been adopted in other places, too: the Geisinger Health System, in Danville, Pennsylvania; the Marshfield Clinic, in Marshfield, Wisconsin; Intermountain Healthcare, in Salt Lake City; Kaiser Permanente, in Northern California. All of them function on the same principles. All are not-for-profit institutions. And all have produced enviably higher quality and lower costs than the average American town enjoys.”

These medical communities have moved away from fragmented, quantity-driven health care to one of prevention and collaboration. Such a system discourages overtreatment, under treatment.....and profiteering.

In other words, medicine is one area of life where market capitalism is not the most efficient way to deliver essential services---despite whatever good intentions those involved in delivering health care may have. Providing quality care at reasonable costs requires a communal effort---preferably one organized and managed by the local medical community itself.

For a White House and a Congress wrestling with the difficult question of how to change the U.S. health care system, figuring out the “cost conundrum” is essential.

It's not surprising that Dr. Gawande's article has stirred a buzz of conversation in Washington, D.C., at the very time that Congress is getting down to the business of revising the American way of health. What does surprise me is a New York Times front page article the other day that describes how President Obama read Dr. Gawande's New Yorker piece and was so impressed by its information and logic that he summoned a number of key senators to his office to discuss it.

Dr. Gawande was essentially a lone wolf, visiting McAllen, El Paso, Grand Junction and other communities to collect information for his article. The White House, has----or certainly should have----all of the same information at its fingertips, along with the work of years of analysts to make sense out of it. It's striking---and not necessarily a promising sign----that the President is about to go into historic battle needing a magazine article to give him insight and direction.

(Joe Rothstein can be contacted at joe@einnews.com)