kitchen table math, the sequel: more is less

Wednesday, May 27, 2009

more is less

What a Texas town can teach us about health care: Costlier care is often worse care.

McAllen [Texas] has another distinction, too: it is one of the most expensive health-care markets in the country. Only Miami—which has much higher labor and living costs—spends more per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average. The income per capita is twelve thousand dollars. In other words, Medicare spends three thousand dollars more per person here than the average person earns.


I gave the doctors around the table a scenario. A forty-year-old woman comes in with chest pain after a fight with her husband. An EKG is normal. The chest pain goes away. She has no family history of heart disease. What did McAllen doctors do fifteen years ago?

Send her home, they said. Maybe get a stress test to confirm that there’s no issue, but even that might be overkill.

And today? Today, the cardiologist said, she would get a stress test, an echocardiogram, a mobile Holter monitor, and maybe even a cardiac catheterization.

“Oh, she’s definitely getting a cath,” the internist said, laughing grimly.


Between 2001 and 2005, critically ill Medicare patients received almost fifty per cent more specialist visits in McAllen than in El Paso, and were two-thirds more likely to see ten or more specialists in a six-month period. In 2005 and 2006, patients in McAllen received twenty per cent more abdominal ultrasounds, thirty per cent more bone-density studies, sixty per cent more stress tests with echocardiography, two hundred per cent more nerve-conduction studies to diagnose carpal-tunnel syndrome, and five hundred and fifty per cent more urine-flow studies to diagnose prostate troubles. They received one-fifth to two-thirds more gallbladder operations, knee replacements, breast biopsies, and bladder scopes. They also received two to three times as many pacemakers, implantable defibrillators, cardiac-bypass operations, carotid endarterectomies, and coronary-artery stents.


Rochester, Minnesota, where the Mayo Clinic dominates the scene, has fantastically high levels of technological capability and quality, but its Medicare spending is in the lowest fifteen per cent of the country—$6,688 per enrollee in 2006, which is eight thousand dollars less than the figure for McAllen. Two economists working at Dartmouth, Katherine Baicker and Amitabh Chandra, found that the more money Medicare spent per person in a given state the lower that state’s quality ranking tended to be.


That’s because nothing in medicine is without risks. Complications can arise from hospital stays, medications, procedures, and tests, and when these things are of marginal value the harm can be greater than the benefits. In recent years, we doctors have markedly increased the number of operations we do, for instance. In 2006, doctors performed at least sixty million surgical procedures, one for every five Americans. No other country does anything like as many operations on its citizens.


I talked to Denis Cortese, the C.E.O. of the Mayo Clinic, which is among the highest-quality, lowest-cost health-care systems in the country. A couple of years ago, I spent several days there as a visiting surgeon. Among the things that stand out from that visit was how much time the doctors spent with patients. There was no churn—no shuttling patients in and out of rooms while the doctor bounces from one to the other. I accompanied a colleague while he saw patients. Most of the patients, like those in my clinic, required about twenty minutes. But one patient had colon cancer and a number of other complex issues, including heart disease. The physician spent an hour with her, sorting things out. He phoned a cardiologist with a question.

“I’ll be there,” the cardiologist said.

Fifteen minutes later, he was. They mulled over everything together. The cardiologist adjusted a medication, and said that no further testing was needed. He cleared the patient for surgery, and the operating room gave her a slot the next day.

The whole interaction was astonishing to me. Just having the cardiologist pop down to see the patient with the surgeon would be unimaginable at my hospital. The time required wouldn’t pay. The time required just to organize the system wouldn’t pay.

The core tenet of the Mayo Clinic is “The needs of the patient come first”—not the convenience of the doctors, not their revenues. The doctors and nurses, and even the janitors, sat in meetings almost weekly, working on ideas to make the service and the care better, not to get more money out of patients. I asked Cortese how the Mayo Clinic made this possible.

“It’s not easy,” he said. But decades ago Mayo recognized that the first thing it needed to do was eliminate the financial barriers. 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.

“When doctors put their heads together in a room, when they share expertise, you get more thinking and less testing,” Cortese told me.


The Mayo Clinic is not an aberration. One of the lowest-cost markets in the country is Grand Junction, Colorado, a community of a hundred and twenty thousand that nonetheless has achieved some of Medicare’s highest quality-of-care scores. Michael Pramenko is a family physician and a local medical leader there. Unlike doctors at the Mayo Clinic, he told me, those in Grand Junction get piecework fees from insurers. But years ago the doctors agreed among themselves to a system that paid them a similar fee whether they saw Medicare, Medicaid, or private-insurance patients, so that there would be little incentive to cherry-pick patients. They also agreed, at the behest of the main health plan in town, an H.M.O., to meet regularly on small peer-review committees to go over their patient charts together. They focussed on rooting out problems like poor prevention practices, unnecessary back operations, and unusual hospital-complication rates. Problems went down. Quality went up. Then, in 2004, the doctors’ group and the local H.M.O. jointly created a regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up. And costs ended up lower than just about anywhere else in the United States.

Grand Junction’s medical community was not following anyone else’s recipe. But, like Mayo, it created what Elliott Fisher, of Dartmouth, calls an accountable-care organization. The leading doctors and the hospital system adopted measures to blunt harmful financial incentives, and they took collective responsibility for improving the sum total of patient care.

The Cost Conundrum
by Atul Gawande
June 1, 2009
The New Yorker

When the needs of the patient come first, medical care costs less.

Judging by the amount of money charter & parochial schools spend to educate children, compared to the amount public schools spend to not educate children, I'd say that principle will turn out to be true of schools, too.


Catherine Johnson said...

"Professional learning communities" work according to this principle.

Must start putting up posts about PLCs.

Anonymous said...

I could leave a snarky comment here about how 1/3 of the population of McAllen is foreign-born, 82% speaks Spanish at home, and 80% are Hispanic of Mexican origin [stats from various sources], and how probably the healthcare that they get for free here is much better than what they would get in their own country, but that would just be rude.

If someone else is paying for it, of course people will soak the system for all they can get... which is how I end up paying $264 for a well-woman exam.

concernedCTparent said...

That was snarky.

How do El Paso, Laredo, Yuma, San Diego, etc. figure into your theory? What about all the U.S. citizens who cross the border into Mexico to take advantage of affordable prescription medication, dental and medical care and even plastic surgery?

My niece had to have stitches out while we were in Mexico on vacation last summer and do you know how much it cost? $2.00 She got a lollipop too.

You're not just rude, you're wrong. If you want to thank somebody, perhaps you might consider thanking the insurance industry for your $264 well-woman exam.

Lsquared said...

Yep, I live in a community that doesn't have that problem, and a regular office visit costs upwards of $300. Insurance companies, of course, only have to pay half of that. It's a mess, and it isn't the uninsured immegrants

Catherine Johnson said...

What's a well-woman exam?

Catherine Johnson said...

Is that exam?

Catherine Johnson said...

The article is long but it is very worth reading.

I wasn't shocked to learn that more expensive care is (or may be generally) lower quality. Years ago there was a Dartmouth professor who did a study of two towns, both in N.H., I think, with very different rates of tonsillectomies.

Plus when we moved from L.A. to here we were suddenly besieged by doctors ordering medical tests for our two autistic kids. In fact, our two experiences -- the Valley versus Westchester County & NYC -- could be used to make the same point.

Our doctors in L.A. practically never ordered tests of any kind.

The minute we set foot in NYC practically every doctor we consulted was shipping us off for tests of every conceivable kind -- TESTS ON AUTISTIC KIDS WHO DON'T COOPERATE, for pete's sake.

Not long after we got here, I started "using my own judgment" and bagging the tests.

But to do that I had to have a very high level of confidence in my own judgment. It was obvious to me that few parents would be in the position, either educationally or emotionally, to consistently reject doctors' advice in the way I was doing.

When I think about it, I was using a similar standard: "Does this help my kids?"

Any test that would lead to nothing but information -- no change in treatment -- I declined to do.

Catherine Johnson said...

SO...the idea that more expensive care might be lower quality wasn't a surprise.

What was a surprise was Atul Gawande's thesis that the essential feature of high quality/low cost care is a laser focus on the patient.

That is ***very*** interesting.

I suspect it's true but I'd like to see the hypothesis tested.

Catherine Johnson said...

If someone else is paying for it, of course people will soak the system for all they can get.Actually, that's an interesting part of the article.

People living in McAllen were getting lots more surgeries than people in El Paso, I think it was.

Nobody wants more surgery.

I've always been a little bothered by the argument that when health care costs are covered by insurance people will "consume" too much health care. How many people like going to the doctor?

I ask that seriously.

I assume there's a group of people who "like" going to the doctor: who see doctor visits as helpful or reassuring, etc. That is: I assume there's a group of people who would over-consumer "free" health care.

I am not in that group.

So I wonder how large it is.

palisadesk said...

Hmmm. The data do not necessarily support the notion that hordes of people will avail themselves unnecessarily of "free" health care, if Canadian experience is anything to go by. Basic services, like doctor visits, most tests, and in-hospital services, are covered by public insurance plans. These are more cost-efficient and provide a higher quality of care to average citizens than is available to many Americans, the costs to businesses are much less for employees, and a significantly lower percent of GDP is spent on health care. It's estimated that GM, Chrysler and Ford save about $1500 per vehicle manufactured in their Canadian plants because of lower health-care costs.

There are pros and cons to every system (and a public health insurance plan like Canadian provinces have would not likely be doable in the USA for many reasons), but although there are well-publicized problems with Canadian medicare (such as limited access to certain cancer treatments and MRI procedures), swarms of poor people, immigrants, or hypochondriacs clogging doctors' offices and running up bills for unnecessary treatments don't seem to be a major problem.

The US has the most expensive health care system in the world, and approximately 5% of the people account for 50% of the costs -- or something astronomical like that. The US also has a scandalous rate of infant mortality and child health issues considering its status as a "developed" nation.

Something needs to be done, but it is not clear what. Many ships have wrecked upon the shoals of health care reform. Blaming immigrants is a cop-out.

Anonymous said...

Comparing infant-mortality rates across countries is much less than useful, since definitions of live birth and registration of births varies widely. In this country, a child who has taken one breath counts as a live birth and is registered accordingly; others use standards much less stringent. I understand that is true in some European countries. Also, in less-developed countries, the birth-registration procedures themselves can be spotty. As manager of an elite youth sports team, I presented their registration cards (proof of identity and birthdate) to tournament officials, as did the manager of the opposing team. Every kid on that team was registered with a birthdate of January 1; apparently the practice in their African country. I talked with the manager, who said that births were always registered that way; for the kids who survived their first year. The kids certainly looked a year older than the other teams.

Also, countries with nationalized health services ration care. They don't call it that, of course, but it happens two ways. First, if you can't get an appointment, you can't get care. Look at the Fraser Institute for specialty-specific wait times in Canada. Also, most Canadians live close to the US border, and US hospitals in that area have facilities to handle the overflow. Think of the lady in labor with twins who, last year, was flown over the Rockies from BC to that great metropolis of Missoula, MT, because no hospital in Canada had two NICU beds available. Also, some kinds of treatment are simply not offered to "older" people. In the early 1980s, I met an American who had just returned from working in the health field in England; no chronic dialysis for anyone over age 55. If you don't think that will happen here, look at the VA and the Indian Health Service, where it is happening NOW. It's hard to get in and they are limiting what screening tests are done so the diagnosis of some cancers will not be made.

Also, hospitals on our southern border are in serious financial trouble, with a number of failures. Anchor babies are a big issue, along with their families.

There are problems with the current system, but the ones with government in charge are worse. Government is already part of the problem. Of course, countries with NHS don't have our lawsuit problems; nor do countries like Mexico, India and various Caribbean countries, where there are clinics targeting affluent Americans. Pay cash up front and no recourse if things go wrong.

Start by letting everyone have health savings accounts and choose the health insurance plan they want: the deductible, the services covered etc., and tax it on the same basis as employer-provided insurance. Also, let people buy insurance across state lines. Some states have so many mandates and restrictions that many insurers have left the state. Also, rein in the lawyers; not all bad outcomes are due to malpractice. Finally, remember that the number of uninsured includes young people who don't choose to buy insurance and illegal immigrants, as well as people who are only temporarily in that category.

Catherine Johnson said...

Just saw these last two comments!

For what it's worth, I agree that infant mortality rates can't be reliably compared across countries.

Ed and I have talked about this a lot in terms of the French system, which seems to work pretty well. At least, the French people we know - and Ed knows many & has lived in the country - are happy with their system.

Nor do you hear stories about rationing and long waiting lists & people flying to other countries for care.

Ed and I have a theory - which pre-dated the Gawande story, actually - that the reason the French system appears to work AND to avoid rationing (or the perception of rationing, at any rate) is that it is an intimate, one-on-one, doctor-patient system. Doctors are in private practice, often working out of their homes (I believe) or out of apartments. They aren't part of huge, bureaucratic HMOs or hospital or university practices.

I wrote an email about this the other day that I may have to post.

Because of our two autistic kids, we have had 20 years' experience of direct, one-on-one, doctor-patient doctoring -- and it is very different from 'regular' bureaucratized doctoring, whether public or private.

I wouldn't be at all surprised to find that "patient-centered care," which is what one of my doctors calls it, is cheaper.

As to rationing, Ed thinks that it's likely that in a patient-centered practice the doctor would inevitably serve as an advocate as well as a doctor, which is what happens in SPED kids who see physicians. The physician would know which of his patients need to 'jump the line' and would make it happen.

At the same time, the relationship of trust would probably allow patients who were going to have to wait to do so feel safe waiting.

I have a couple of other examples but this is long enough.

Catherine Johnson said...

btw, this isn't to argue for national health care or not-national health care etc. -- I'm flummoxed by the whole thing.

I'm just saying that Ed and I think we have an idea why the French system appears to work.

Anonymous said...

When my college-student son and I were in France in 02, we both noticed a large number of people on crutches; both younger people with deformities (I saw a club foot) and older people with hip/knee problems. More people here get knee and hip replacements. Also, I think it was later that summer that there was a large number of deaths during an unusual heat wave; elderly people unable to get out of their apartments and lots of hospitals with limited staff because of the sacred August vacation. My son noticed even higher rates of people on crutches in Germany; he emailed us about it within a week of his arrival.

I've also talked to a number of Canadians who are happy with their system, but they were not in the group with real chronic-disease issues or major illnesses. The really unhappy ones fall into the last categories.

Catherine Johnson said...


I've never noticed that but I may be oblivious. (Scratch that. I **am** oblivious.)

Oddly enough, I'm going to France in a couple of weeks so I'll keep my eyes peeled. I'll get Ed to debrief his friends, too.

The heat wave deaths were an absolute scandal.

I've also talked to a number of Canadians who are happy with their system, but they were not in the group with real chronic-disease issues or major illnesses. The really unhappy ones fall into the last categories.

right - I'll ask about that group & see what our friends say.

Meantime, I talked to my doctor this week, who feels about US medicine the way I feel about US public education. She says we should all read Andy Kessler's The End of Medicine, which I've ordered.

I don't think I can do justice to her observations here....well, why don't I quote her.

"Medicine is a 1.8 trillion dollar a year industry that is based on a fraud." (She's Austrian & her grammar isn't always exact.)

She says medicine is PURE gizmo idolatry, to the point that medicine is no longer medicine.

She says there are no tests with predictive validity (I didn't ask about blood tests - we were talking about colonoscopies, mammograms, bone densities, etc.)

I told her that when I was a child, my dad didn't have health insurance because he didn't want health insurance; he could pay for treatment. This was with four kids and a wife.

She said, "Of course."

Before I read Gawande, it was my doctor who said, "I don't treat patients. I treat Catherine. I treat Jane. I treat Alan."

She flatly rejects the group-mean approach to the practice of medicine.

Catherine Johnson said...

I have to ask her next time what she thinks about insurance & single payer systems, etc.

She doesn't take insurance that I know of.

Allison said...


Did you read the Time article on Mayo?

It was even more fascinating, comparing it to Sloan Kettering and others.

Mayo is FANTASTIC at controlling costs through improved everything. It's the pinnacle example of what the hypothetical Obamacare can do.

And the bottom line? It's losing money. A lot of money. Too many medicare patients are sinking it.

Soon we are going be having this conversation about education, too. Education costs are spiraling out of control, and the only solution people are going to find is rationing...

Paul B said...

Rationing is already happening it's just well disguised. Every kid that walks into a classroom is served up the same gruel regardless of their needs or appetites. This is the type of rationing you get from monopolies.

Think about the typical delivery model of anything in the private sector. How many different cell phones are there? How many different types of cars can you buy? Modern companies have figured out how to deliver increasingly personalized services or products to consumers while sliding persistently down the cost curve. If you contemplate a service that degrades over time while being forever more expensive, it will be brought to you by a government, or a company that is heavily regulated by government (your cable company for example).

Good health care is inexpensive because it is focused. One size fits all health care degrades to a monopolistic model. You get whatever the system determines to be 'optimal', for the system, not for the consumer.

In fact, public education is probably an excellent model for where the single payer health care system will end up.


Paul B said...

We are blessed in Massachusetts with two famous Shriners Hospitals. One is a burn center and the other specializes in child orthopedics. In their entire history they've never charged anybody for anything. They're totally supported by donations.

Now they're strapped for cash and for the first time are considering taking insurance and charging for services. This will surely have a dramatic effect on their costs. Ironic isn't it?

Catherine Johnson said...

Good health care is inexpensive because it is focused. One size fits all health care degrades to a monopolistic model. You get whatever the system determines to be 'optimal', for the system, not for the consumer.

In fact, public education is probably an excellent model for where the single payer health care system will end up.

That is exactly the way I see it (though I have NO idea whether I'm right, obviously).

Remember that great letter at Irvington Parents Unite?? With this beautiful ending:

I realize that you have an entire school system to worry about and that I am focused only on one child. However, after many years of experience with education, I have become convinced that a large percentage of children with real potential are brushed aside and discouraged by education systems that concentrate on the system rather than the needs of each child. The converse is also true. Where the needs of each child are understood and accommodated, schools succeed. I have experienced it personally.

Catherine Johnson said...

Actually, when I say I have 'no idea I'm right,' what I mean is that I have no idea how to solve huge, systemic problems.

I'm confident that 'one size fits all' education & medicine is lousy.

I'm also confident that other things being equal, an "I don't treat patients, I treat you" or "I don't teach students, I teach you" is going to be less expensive and better quality.

Unfortunately, as Paul & Allison point out, other things aren't equal.

Catherine Johnson said...

I'll read the Mayo article.

Catherine Johnson said...

In fact, public education is probably an excellent model for where the single payer health care system will end up.

That's sure what I'm worried about (again, I don't have an 'opinion' on what ought or ought not to be done on health care).

One question I want to ask when I get to France: do they have the same situation England does (& we do now) where more affluent people opt out of the government plan & pay higher fees for private care?

Ed and I are there now. None of our psychiatrists are covered on our plan until after we've spent thousands. And when Ed needed a delicate and potentially dangerous surgery we ended up having to pay out of pocket. There wasn't a single surgeon on the plan whom we trusted to do it.

We weren't being 'picky,' either. As I recall, we found only one surgeon who said he'd do it. He was a plastic surgeon, not the category of doctor we were told we needed (ear, nose, & throat).

Ed met with the guy, who:

a) looked at the scans & told Ed he might have metastasized cancer

b) told Ed he'd need plastic surgery that wouldn't be covered by the plan & asked for full payment up front

As to part a, I am not a doctor and my first thought was: doesn't Ed have a lot of funky scar tissue from the first botched surgery? Wouldn't that be visible on the scan? (The botched surgery was Covered By The Plan.)

Answer: yes. The little specks on the scan were scar tissue. It took the off-the-plan doctor 1 second to glance at the scan and say, "This is scar tissue."

Question: how is it possible for me to figure this out & not possible for a Doctor On The Plan?

As to part b, Ed didn't need plastic surgery.

Unfortunately, he currently needs another procedure he probably won't be able to get. There's maybe one doctor who can do it & he's booked for the rest of his life.