Health Care Costs: Insurance Reform Is Not Enough

“The health care system in the United States” is this or that, argue both pundits and ordinary citizens. What gets forgotten is that “the health care system” in this country does not exist. If there were one system, we would not have the wide disparity of cost from one geographical region to another cited by Dr. Atul Gawande.

American medicine’s costs and benefits are more often compared to and contrasted with costs and benefits of medical care in other countries. Gawande’s look at our own country from one area to another shows a surprising and troubling picture. He finds a poor town, McAllen, Texas, that has medical costs per capita equal only to wealthy Miami, Florida, and he looks for an explanation.

Can it be that these two towns have the worst health in the country? No, that doesn’t turn out to be the case. Statistics for cardiovascular disease, asthma, HIV, infant mortality, cancer and injury are lower in McAllen than the average across America. Next hypothesis: can it be that people in McAllen are getting care superior to the rest of the American population? No evidence for that, either, and the county has a lower than average number of medical specialists.

Medicare ranks hospitals on twenty-five metrics of care. On all but two of these, McAllen’s five largest hospitals performed worse, on average, than El Paso’s. McAllen costs Medicare seven thousand dollars more per person each year than does the average city in America. But not, so far as one can tell, because it’s delivering better health care.

At this point in Gawande’s investigation, the high cost of health care in McAllen is still a mystery to him. Some doctors, when questioned, wanted to blame malpractice suits. (We’ve all heard claims that the cost of malpractice insurance is responsible for the high cost of health care, haven’t we?) But Texas had passed legislation capping “pain and suffering” awards, and the numbers of such lawsuits had dropped to almost zero, as one cardiologist admitted.

Finally someone proposed a shocking answer to the mystery:

“Come on,” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures.

The surgeon came to McAllen in the mid-nineties, and since then, he said, “the way to practice medicine has changed completely. Before, it was about how to do a good job. Now it is about ‘How much will you benefit?’"

Gawande gave the doctors around the restaurant table a hypothetical case (read details in the original article) and asked what treatment would have been prescribed 15 years earlier. “Send her home,” they agreed. And now? Stress test, EKG, Holter monitor and maybe a cardiac cath. Why? Because the doctors don’t trust their judgment? Because they’re afraid of being sued? Because the bills will be paid. Whether it’s Medicare or private insurance, in some places in this country—not everywhere—the fact that someone will pay seems enough of a reason to prescribe unnecessary tests. And this doesn’t even assure better care or outcomes.

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.

So now another question comes up: Why is this not the case everywhere in the country that medical tests and procedures are overutilized? Why and how do some areas with much lower costs deliver better care? How does Rochester, Minnesota, for example, home of the Mayo Clinic and #1 destination of choice for many out-of-state seekers after top-quality care, keep its Medicare spending in the bottom 15% of the country?

Overutilization was obviously only a piece of the puzzle, not the whole solution to the mystery, and here I’ll cut to the chase scene. What Gawande finally finds at the bottom of all the figures and statistics and differences from one end of the country to the other is that doctors in places where health care costs are high provide and refer patients for the expensive tests and procedures, but the difference seems to have nothing to do with their medical training--it was more pointedly what one hospital administrator called “the culture of money.” Doctors in McAllen, this administrator said, had “entrepreneurial spirit,” and the medical decisions they made for patients were driven by their own financial goals.

We won’t solve the health care crisis in this country by forcing people to purchase health insurance they couldn’t afford in the first place. A public option isn’t the answer, either. Neither private individuals nor employers nor the government can afford to finance the high and rapidly rising cost of American health care. The costs need to come down.

Gawande authored a subsequent article that detailed some of the ways cost can be reduced, but the overall problem, the “entrepreneurial” attitude to health care provision, is a big, tangled knot that won’t be quickly untied.

The Checklist Manifesto, by Atul Gawande, is on my book order for this week.