McAllen, Texas likes to think of itself as the Square Dance Capital of the World. McAllen doesn’t like to think of itself as the home of the most over-priced health care in the U.S..
Yet it is, as surgeon/author Dr. Atul Gawande reports in the June 1, issue of The New Yorker. (Thanks to reader Jim Jaffe for calling my attention to the article when it first hit the blogosphere)
McAllen seems an unlikely spot for Gold-Coast Medicine. “Lonesome Dove was set around here,” Gawande writes. “McAllen is in Hidalgo County, which has the lowest household income in the country.” Nevertheless, if you have the patience to pore over nationwide Medicare data, you’ll discover that “only Miami—which has much higher labor and living costs—spends more [than McAllen] per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average,” Gawande notes. “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.”
And it’s not just Medicare. Research shows that in regions where Medicare spends more, private insurers also have been shelling out more and more each year. Indeed, nationwide, reimbursements from private insurers have been climbing by an average of roughly 8% a year. (See figure 1 here)
The Mystery of Health Care in McAllen
Gawande, who is both a surgeon at the Brigham and Women's Hospital in Boston and an assistant professor at the Harvard School of Public Health, begins by emphasizing that runaway health care inflation is leading the nation toward an economic Armageddon. He quotes President Obama: “The greatest threat to America’s fiscal health is not Social Security. It’s not the investments that we’ve made to rescue our economy during this crisis. By a wide margin, the biggest threat to our nation’s balance sheet is the skyrocketing cost of health care. It’s not even close.”
“The question we’re now frantically grappling with is how this came to be, and what can be done about it,” Gawande observes. “McAllen, Texas, the most expensive town in the most expensive country for health care in the world, seemed a good place to look for some answers.”
What Gawande found in McAllen will shock some—though it shouldn’t surprise anyone who has read Money-Driven Medicine: The Real Reason Health Care Costs So Much. “Here, along the banks of the Rio Grande, in the Square Dance Capital of the World,” Gawande reports, “a medical community has come to treat patients the way subprime-mortgage lenders treated home buyers: as profit centers.
When Gawande began asking local doctors and hospital administrators why health care in McAllen cost so much than in other places, at first, many expressed surprise: “Really, are you sure?”
Disbelief gave way to many of the usual rationalizations for the high cost of care in the U.S. First, blame the patients—particularly Fat People: “Just look around,” said one McAllen resident who Gawande met at McDonald’s. “People are not healthy here.”
At first glance, this seems to make sense. “McAllen, with its high poverty rate, has an incidence of heavy drinking sixty per cent higher than the national average,” Gawande notes. “And the Tex-Mex diet has contributed to a thirty-eight-per-cent obesity rate.” When he meets a local heart surgeon, he learns that business is brisk: this physicians explains that in the past twenty years, he has done some eight thousand heart operations, “which exhausts me just thinking about it,” Gawande comments.
But when Gawande studied local public-health statistics, he discovered “that cardiovascular-disease rates in the county are actually lower than average, probably because its smoking rates are quite low. Rates of asthma, H.I.V., infant mortality, cancer, and injury are lower, too. El Paso County, eight hundred miles up the border, has essentially the same demographics. Both counties have a population of roughly seven hundred thousand, similar public-health statistics, and similar percentages of non-English speakers, illegal immigrants, and the unemployed. Yet in 2006 Medicare expenditures (our best approximation of over-all spending patterns) in El Paso were $7,504 per enrollee—half as much as in McAllen.
Searching for another answer, Gawande asked himself, “Was the explanation, that McAllen was providing unusually good health care? He took a walk through Doctors Hospital at Renaissance, a physician-owned hospital in the McAllen metropolitan area, and was impressed by what he saw: “the sixteen operating rooms, the laparoscopy suite, with its flat-screen video monitors, the hybrid operating room with built-in imaging equipment, the surgical robot for minimally invasive robotic surgery . . . virtually everything you’d find at Harvard and Stanford and the Mayo Clinic.”
And yet, and yet . . .. Gawande acknowledges there’s no evidence that the treatments and technologies available at McAllen are better than those found elsewhere in the country. The annual reports that hospitals file with Medicare show that those in McAllen and El Paso offer comparable technologies—neonatal intensive-care units, advanced cardiac services, PET scans, and so on. Public statistics show no difference in the supply of doctors. Hidalgo County actually has fewer specialists than the national average.
“Nor does the care given in McAllen stand out for its quality. 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.”
Granted, we’re still learning out to measure quality of care. But with bills so much higher in McAllen, you would expect to find at least one of the five hospitals to show superior performance in some areas.
The Doctors Let Down Their Hair
Next Gawande went out to dinner with a group of doctors.“All were busy, full-time, private-practice doctors who work from seven in the morning to seven at night and sometimes later, their waiting rooms teeming and their desks stacked with medical charts to review,” Gawande explains.
“Some were dubious when I told them that McAllen was the country’s most expensive place for health care. I gave them the spending data from Medicare.” But Gawande showed them how health care bill in McAllen had soared in the past 17 years. “In 1992, in the McAllen market, the average cost per Medicare enrollee was $4,891, almost exactly the national average. But since then, year after year, McAllen’s health costs have grown faster than any other market in the country, ultimately soaring by more than ten thousand dollars per person.
“’Maybe the service is better here,’ the cardiologist suggested. ‘People can be seen faster and get their tests more readily,’ he said.
“Others were skeptical. ‘I don’t think that explains the costs he’s talking about,’ the general surgeon said.”
Then, inevitably, one doctor hit upon the explanation that so many physicians cling to:
“’It’s malpractice,’ a family physician who had practiced here for thirty-three years said.
“’McAllen is legal hell,’ the cardiologist agreed. ‘Doctors order unnecessary tests just to protect themselves,’ he said. Everyone thought the lawyers here were worse than elsewhere.
“That explanation puzzled me,” Gawande notes. “Several years ago, Texas passed a tough malpractice law that capped pain-and-suffering awards at two hundred and fifty thousand dollars. Didn’t lawsuits go down?”
“’Practically to zero,’ the cardiologist admitted.
Then, someone broke the white-coat version of the “blue wall of silence” that we associate with policeman who don’t share their guild’s secrets with the public.
“’Come on,’ the general surgeon finally said. ‘We all know these arguments are bullshit. There is over utilization 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,” Gawande explains. Since then, this surgeon told him, “‘
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 [the doctor] benefit?’
“Everyone agreed that something fundamental had changed since the days when health-care costs in McAllen were the same as those in El Paso and elsewhere. Yes, they had more technology. ‘But young doctors don’t think anymore,’ the family physician said.”
The surgeon offered an example. General surgeons are frequently asked to see patients suffering with pain caused by gallstones. If there aren’t any complications, the pain goes away on its own or with pain medication. After switching to a lower-fat diet, most patients have no further problems. Only those who suffer recurrent episodes need surgery. .
“But increasingly,” Gawande was told, “in McAllen surgeons simply operate. The patient wasn’t going to moderate her diet [anyway], they tell themselves. The pain was just going to come back. And by operating they happen to make an extra seven hundred dollars.”
Gawande offered the doctors another 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.”
The Numbers Support the Stories.
To determine whether overtreatment was truly the problem in McAllen, Gawande sought information from three sources: Jonathan Skinner, an economist at Dartmouth’s Institute for Health Policy and Clinical Practice, which has three decades of expertise in examining regional patterns in Medicare payment data; and two private firms that digest data from private insures, D2Hawkeye, an independent company, and Ingenix, UnitedHealthcare’s data-analysis company—to analyze commercial insurance data for McAllen. “The answer was yes,” Gawande reports. “Compared with patients in El Paso and nationwide, patients in McAllen got more of pretty much everything—more diagnostic testing, more hospital treatment, more surgery, more home care.”
For example “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.” Keep in mind that demographics are very similar in McAllen and in El Paso. “ 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 fie 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. And Medicare paid for five times as many home-nurse visits.”
Gawande’s conclusion: “The primary cause of McAllen’s extreme costs was, very simply, the across-the-board overuse of medicine.”
The Culture of Money
But Gawande still hadn’t solved the mystery of McAllen. Why do doctors in McAllen practice medicine so very differently from doctors in El Paso?
He considered the possibility that the doctors in McAllen were trained differently. Another blind alley: “There was no sign, that McAllen’s doctors as a group were trained any differently from El Paso’s.”
Could the difference have something to do with the fact that one of McAllen’s hospitals is for-profit, while a second is physician-owned? The hospital that is owned by doctors “has a reputation (which it disclaims) for aggressively recruiting high-volume physicians to become investors and send patients there,” Gawande writes. “Physicians who do so receive not only their fee for whatever service they provide but also a percentage of the hospital’s profits from the tests, surgery, or other care patients are given. (In 2007, its profits totaled thirty-four million dollars.)” Some argued that this gives physicians “an unholy temptation to over order.”
“Such an arrangement can make physician investors rich,” Gawande concedes. “But it can’t be the whole explanation. The hospital gets barely a sixth of the patients in the region; its margins are no bigger than the other hospitals’—whether for profit or not for profit—and it didn’t have much of a presence until 2004 at the earliest, a full decade after the cost explosion in McAllen began.”
But one morning, Gawande reports, he met with “a hospital administrator who had extensive experience managing for-profit hospitals along the border” and he offered a broader explanation of why doctors in McAllen practicing differently than those in El Paso: the culture of money.
“’In El Paso, if you took a random doctor and looked at his tax returns eighty-five per cent of his income would come from the usual practice of medicine,’” he told Gawande. “But in McAllen, the administrator thought, that percentage would be a lot less.
“He knew of doctors who owned strip malls, orange groves, apartment complexes—or imaging centers, surgery centers, or another part of the hospital they directed patients to. They had ‘entrepreneurial spirit,’ he said. They were innovative and aggressive in finding ways to increase revenues from patient care. ‘There’s no lack of work ethic,’” he added. “But he had often seen financial considerations drive the decisions doctors made for patients—the tests they ordered, the doctors and hospitals they recommended—and it bothered him. Several doctors who were unhappy about the direction medicine had taken in McAllen told me the same thing,” Gawande confides. “‘It’s a machine, my friend,’ one surgeon explained.
“No one teaches you how to think about money in medical school or residency,” Gawande adds. “Yet, from the moment you start practicing, you must think about it. You must consider what is covered for a patient and what is not. You must pay attention to insurance rejections and government-reimbursement rules. You must think about having enough money for the secretary and the nurse and the rent and the malpractice insurance.”
But while many doctors think about finances only when they must, others are intoxicated by the smell of freshly-printed green paper. These “are the physicians who see their practice primarily as a revenue stream,” Gawande writes. “They instruct their secretary to have patients who call with follow-up questions schedule an appointment, because insurers don’t pay for phone calls, only office visits. They consider providing Botox injections for cash. They take a Doppler ultrasound course, buy a machine, and start doing their patients’ scans themselves, so that the insurance payments go to them rather than to the hospital. They figure out ways to increase their high-margin work and decrease their low-margin work. This is a business, after all.”
“In every community, you’ll find a mixture of these views among physicians, but one or another tends to predominate. McAllen seems simply to be the community at one extreme,” Gawande explains. In other words, a focus on money has become part of the “signature” of clinical care in McAllen. In some communities it i
s acceptable for doctors to talk openly about money. In others it is not.
In McCallen, Gawande reports, one “hospital executive told me, he’d seen the behavior cross over into what seemed like outright fraud. ‘I’ve had doctors here come up to me and say, ‘You want me to admit patients to your hospital, you’re going to have to pay me.’ ”
“How much?” Gawande asked.
“’The amounts—all of them were over a hundred thousand dollars per year,’ he said ,The doctors were specific. The most he was asked for was five hundred thousand dollars per year.”
“He didn’t pay any of them, he said: ‘I mean, I gotta sleep at night.’ And he emphasized that these were just a handful of doctors. But he had never been asked for a kickback before coming to McAllen.”
In part 2 of this post, I’ll talk about how physicians in different communities view medicine differently. This isn’t to say that money isn’t an obsession for some doctors in Boston, where Gawande practices. Because there are so many doctors and hospitals in that city, competition is fierce, which tends to lift prices as hospitals and some doctors invest in the most expensive equipment and the most luxurious amenities available while vying for affluent well-insured patients. In order to pay for the equipment, they use it –and overuse it—research shows, padding medical bills.
But in various parts of the country there are communities where doctors are fighting for what Gawande calls “the soul of medicine.” These doctors are setting up “accountable care organizations,” he reports “in which doctors collaborate to increase prevention and the quality of care, while discouraging overtreatment, undertreatment, and sheer profiteering.”
This, Gawande says, is why it doesn’t make a difference who pays for healthcare, whether it is a for-profit insurer or the government. Ultimately, he argues doctors and hospitals in local medical communities must be willing to band together to put people before profits. Health care providers must hold themselves accountable for containing costs and lifting quality. Thus, “it doesn’t matter who is paying health care bills. . . . Activists and policymakers spend an inordinate amount of time arguing about whether the solution to high medical costs is to have government or private insurance companies write the checks. . . . These arguments miss the main issue. When it comes to making care better and cheaper, changing who pays the doctor will make no . . . difference.”
In part 2, I will explain why I disagree with Gawande on this critical point. I completely agree that local health care providers must be in the front lines of reform. But I believe that physicians who recognize the problem of over treatment in our system need help, both from government and from non-profit insurers who share their goals. We need organized medicine. And I would argue that, in the course of telling his story, Dr. Gawande himself illustrates how non-profit insurers have helped create health care delivery systems that allow doctors and hospitals to collaborate in providing patient-centered, accountable for care.
That said, I also believe that nothing will happen unless physicians themselves want to fight for the soul of medicine. External carrots and sticks are not sufficient. We’ll have true health care reform only if physicians face up to the fact that the current course is unsustainable. If over-use of advance medical technologies continues to drive health care inflation, and the cost of care continues to climb by 8 percent a year, our medical bills will double in just nine years. That is not going to happen: What can’t happen, won’t. Instead, the system will hit a wall and crash– splitting in half. At that point, we will find ourselves living in a third-world health care system that over-treats our wealthiest citizens while under-treating everyone else. In that scenario, there will be no winners except those who profit from over treatment. Even the wealthy will die of a thousand cuts and a thousand burns