Monday, November 23, 2009

A Tale of Two Towns

The summary below comes from an article originally printed in the New Yorker on June 1, 2009 and written by Atul Gawande. Atul Gawande is a practicing surgeon in Boston, MA, frequently writes for New Yorker magazine, and has written his own books called Complications and Better.

I love this article. I highly, highly encourage you to read it yourself on the New Yorker website. I think Atul is a beautiful writer, and this article has been vetted by some of the best editors in the business, so this summary barely does it justice.

Atul compares two towns in Texas with similar demographics, incomes, population sizes, public-health statistics, illegal immigrant percentages, and unemployment rates. Basically, just about everything is the same, but the big difference between these two towns is that McAllen, TX costs twice as much as its nearby neighbor El Paso, TX and almost twice as much as the national average. In fact, Medicare spends $15,000/enrollee even though the per capita income of the town is $12,000! He explores many different possible reasons for such a big difference, but it boils down to one thing: overutilization of healthcare. There are too many tests, services, and procedures being ordered by physicians. Ultimately, Atul blames the entrepreneurial spirit and culture of McAllen that has infected the market since 1992 – the last time that McAllen’s costs were on par with the national average. Doctors not only own their own practices but may also be part equity owners in various specialized surgery centers and other provider facilities. The incentive to recommend too many procedures and tests proves to be too much.

I think my favorite part of the whole article is the sentence that states, “the real puzzle of American health care…is not why McAllen is different from El Paso. It’s why El Paso isn’t like McAllen. Every incentive in the system is an invitation to go the way McAllen has gone.”

Having read a lot of political opinions and listened to political pundits, it’s quite refreshing to see the correct conclusion being drawn from an example of two divergent healthcare costs. Many people point to the efficient exception asking – why isn’t everyone else just like this? I’m a big believer in motivations from incentives and conditioning through learned behavior. I studied a lot of economics, psychology, sociology, and statistics, so this education significantly influences my view the world. The fact is that our system today rewards the behavior in McAllen, so it should not be a surprise that McAllens exist in the US. Perhaps the degree is a bit amazing, but look for the outlier, and it will be found. Atul’s ending is a bit fitting and foreboding, “the decision is whether we are going to reward the leaders who are trying to build a new generation [healthcare delivery models]. If we don’t, McAllen won’t be an outlier. It will be our future.” I think he’s right.

We can’t continue to ask our doctors to be altruistic saints by choosing between what is right and what makes financial sense. If each doctor did what was best for himself, as they do in McAllen, the result is disaster. In a certain way, it is similar to a prisoner’s dilemma where the collection of individuals’ optimal decisions is the worst outcome for the group. Antibiotics is one example – physicians almost always prescribe the antibiotic for the patient because that patient will be better off in any individual instance, but over time this overprescribing produces antibiotic-resistant bacteria that is worse for the entire system. Of course if physician 1 does it, it’s not a big deal, but if physicians 1-10,000 do it, then it becomes an issue. Changing the incentives of physicians is not an easy task. However, there are a few places that have managed to change the way they delivery healthcare.

Next we’ll take a look at some of these places that seem to have achieved healthcare Zen – lower costs, better outcomes, happy patients, and happy doctors.

Sources: New Yorker


  1. If you think this is expensive, wait till fee-for-service and concierge medicine becomes mainstream. A lot of docs, some I know, are going the no-insurance fee-based service because of the headache and paperwork for reimbursements and claims. Though I don't agree with the principle I don't blame them either, because all the work required to deal with insurance is too much.

  2. "McAllen, TX costs twice as much as its NEARBY neighbor El Paso, TX"

    Not so nearby.
    Google Maps shows it's 790 miles from McAllen to El Paso.

  3. Texas Monthly: Wealth Care
    Is a loophole in our health insurance system costing the state millions in unnecessary spending or saving people’s lives in the Rio Grande Valley?

    Texas Monthly: Mismanaged Care
    A unique confluence of medicine, money, and politics is driving health care costs in the Rio Grande Valley. At the center of it all is a Democrat from Palmview, who is already under indictment for unreported income.

    Washington Post: An Interview With Atul Gawande
    (rebutting McAllen Doctors)

    The New Yorker: Atul Gawande: The Cost Conundrum Redux
    (rebutting McAllen Doctors)

    The Cost Conundrum
    (The original New Yorker article that started it all)

  4. @ Albert
    Concierge medicine! Interesting concept. I've heard of some physicians that don't take insurance etc. as well. As far as I understand though, it's primarily reduced to very rich clientele. If you know more about it though, I'd love to hear about it. The most interesting healthcare delivery model I've heard of is located in South Florida (yes, the home of Medicare Fraud). They're called Leon Medical Centers - basically the approach to healthcare is thought of as a Ritz-Carlton like service atmosphere. Big open lobby when you step in, cappucinos in the waiting room, free bus rides from the home to the Leon Medical Center, etc. By making sure the patients get the right care at the right time, they can actually keep costs lower while providing very high quality care and service.

    @ Charo
    Thanks for the links to the post-article information. That's stuff I actually hadn't seen yet, so they were helpful. I found the political carve outs pretty interesting (and quite sad as well).

    I know of two companies on the for-profit side that deal with McAllen. 1) Universal Health Services is a hospital that existed before the Doctors Hospital at Renaissance (the same hospital that Atul refers to). These guys are definitely pretty bitter about Renaissance - accusing them of opening up/expanding surgery centers that take away the most profitable parts of the hospital business while leaving the unprofitable parts for others. 2) A company called HealthSpring recently acquired a Medicare Advantage HMO that was losing money. They've been trying to turn it around, but they'll tell you first hand that the costs there are very difficult to control. Incidentally, HealthSpring also owns the Leon Medical Centers that I pointed out above. So managed care is coming to McAllen - just not on the commercial side (as far as I am aware). It'll be interesting to see how it all unfolds.

  5. The two issues with "concierge medicine" comes from two different aspects. The first one is economic; how the principle works is that it's a fee-for-service model that requires the patient to pay for visits + an annual fee. This model came into being because physicians were sick of tired of dealing with insurance and cuts in Medicare/Medicaid. The economic issue is that it forces patients to pay extra to physicians who do concierge medicine to basically get the same standard of care they got before. Patients getting the right care at the right time with this is misleading; obviously they will be getting the standard of care when needed, but in order to be a licensed physician in the US, you are REQUIRED to provide the standard of care if you want to keep your license. The extra $1,500 a year forked up may let patients sit in plush nice chairs, enjoy coffee and TV while they wait, and have more physician contact, but the care is basically the same. If patients don't pay, they get shunted off to other physicians who will be even more burdened with higher patient loads, or will have to see nurse practitioners or physician assistants for cases that need to be managed by physicians. What is even more ironic about this is that wealthier patients tend to require less expensive treatment than poorer patients because end-stage disease pathology and prevalence tend to be more concentrated in patients of lower socioeconomic status (many cancers and systemic diseases tend to run in such patients; retrospective case studies have proven this to be true). In my opinion if this practice grows, it will create a vicious cycle that'll result in two ways: patients will basically have to fork out even more money to get the same standard of care, resulting in higher costs overall; or they will have to resort to seeing a even more burdened primary care provider, a NP or PA, or may even have to forgo seeing their physician because of the costs. If this issue is limited to the wealthy, fine. It's their money, let them spend it on their care as they wish if they want the doctor's office to be a country club. If this becomes more widespread, this will for sure result in even more limited care for middle-class patients.

    The other aspect is an ethical/moral aspect. The physician-patient relationship is a very respected and sacred one. One of the foundations of it is that if a patient is sick, it is a physician's obligation to see and treat the patient, regardless of ability to pay or not. Though the purity of the principle is impractical, the main point of payment not being an issue of good patient care is tantamount to physicians doing the best for the patients. How would you feel if your physician based how they approached, treated, and managed you based on your economic status? All patients want to be treated respectfully and ethically by their physicians, regardless of who they are. Concierge medicine gets in the way of that completely. If it remains in its current state, I'd be concerned but not too alarmed. If it becomes more widespread, I would then be alarmed, because future physicians like me would be tempted to pre-select patients who tend to be healthier and wealthier, where our care could be more useful treating those who need it. This might sound crass for me to say it, but this is basically health care rationing for the wealthy. When I started my clinical rotations, I started to see how economic status played such a part in how patient care is handled. If I as a physician submit to this philosophy even more, I am breaking an oath physicians have held for centuries.