The Real Healthcare Villains: Damned Doctors!

Cherished interlocutor FascistSocialist, whom I will charitably refer to as FS, has been working very hard to keep me honest. Don't think I don't appreciate it! I especially appreciate his recommendation of a piece in the New Yorker, by Atul Gawande. It is a very good article.

Gawande focuses on McAllen, Texas, which he says is the most expensive city for Medicare in the country. The amount spent per enrollee is twice the national average, and three times (I think he says this) the average in El Paso. What gives?

The answer is that doctors in McAllen have come to think of their medical practice not as a service but as a revenue stream. They order tests and treatments that have no reasonable connection to better health outcomes in order to fund all their other investments. So, though medical care in "the Square Dance Capital of the World" is much more expensive, the people of McAllen do not benefit.

Is this what is driving up American healthcare costs? Gawande's piece is an excellent example of investigative journalism, but it isn't a study in any sense, even of McAllen. To know for sure whether Gawande is right, a much more rigorous examination of the facts would be necessary. I say this not to discredit the piece. I think it is dead spot on. I say it only to point out that generalizing to the larger healthcare system is certainly suggested but not yet warranted. We can't know from this how pervasive the problems in McAllen are in the country at large.

The problem with McAllen is not an unfamiliar one to anybody who has followed the larger healthcare debate. American doctors are generally paid on a fee for service basis, meaning that more services mean more money even if they don't do any good. The best healthcare institutions, like the Mayo Clinic, focus on outcomes instead of services provided. This results in better and more cost-effective care.

So maybe the question to ask is whether the Mayo Clinic model could be made universal in the system at large. Are any of the healthcare proposals before Congress actually doing that? Gawande doesn't provide much hope.

We began talking about the various proposals being touted in Washington to fix the cost problem. I asked him whether expanding public-insurance programs like Medicare and shrinking the role of insurance companies would do the trick in McAllen.

"I don't have a problem with it," he said. "But it won't make a difference." In McAllen, government payers already predominate—not many people have jobs with private insurance.

How about doing the opposite and increasing the role of big insurance companies?

"What good would that do?" Dyke asked.

The third class of health-cost proposals, I explained, would push people to use medical savings accounts and hold high-deductible insurance policies: "They'd have more of their own money on the line, and that'd drive them to bargain with you and other surgeons, right?"

He gave me a quizzical look. We tried to imagine the scenario.

The problem is not basic institutions, but medical culture. Fixing culture by reforming institutions goes back to the ancient Greeks, but it is a very difficult business. Gawande gives us some clues:

McAllen and other cities like it have to be weaned away from their untenably fragmented, quantity-driven systems of health care, step by step. And that will mean rewarding doctors and hospitals if they band together to form Grand Junction-like accountable-care organizations, in which doctors collaborate to increase prevention and the quality of care, while discouraging overtreatment, undertreatment, and sheer profiteering.

Under one approach, insurers—whether public or private—would allow clinicians who formed such organizations and met quality goals to keep half the savings they generate. Government could also shift regulatory burdens, and even malpractice liability, from the doctors to the organization. Other, sterner, approaches would penalize those who don't form these organizations.

This is pretty good, but it's thinking on the fly. Gawande doesn't really know how to turn the American system into a bunch of Mayo Clinics. But if he is right, then the President and Congress are wrong. Insurance companies are not the villains, Doctors are. And insurance is not the solution, whether public or private.

Dramatic improvements and savings will take at least a decade. But a choice must be made. Whom do we want in charge of managing the full complexity of medical care? We can turn to insurers (whether public or private), which have proved repeatedly that they can't do it. Or we can turn to the local medical communities, which have proved that they can. But we have to choose someone—because, in much of the country, no one is in charge. And the result is the most wasteful and the least sustainable health-care system in the world.

I like the idea of salvation by medical communities. Barack Obama and Barney Frank won't like it. They think the whole point of healthcare reform is to get single payer. Thanks for recommending this article, FS. I agree with pretty much everything it says. It won't make any difference.

And even if it did, it won't solve the larger fiscal problems facing the future of healthcare.  We have been told for decades that we can have something for nothing if only we weed out waste and fraud from this or that system.  It never works out that way.  Systems changes involve costs of their own, and more efficient systems generate more demand.  Still, Gawande points toward a much more honest and effective medical culture.  That's no small achievement. 

Comments

[FascistSocialist]

Thanks for reading, but I do not agree with your analysis.

First, I think it is incorrect to draw the conclusion from this article that reforming the health insurance industry will do nothing. It will not improve patient care directly (except for those people denied coverage or wrongly dropped), which is the problem Gawande is talking about in his article, but it will have other effects such as: improved reporting, expanding coverage and a more honest/transparent insurance system.

And I don't think his conclusion is necessarily that doctors are to blame, there are other factors at play too like kick backs between practices and rehab clinics and home health care clinics and other health care periphery groups, the for profit hospitals and a simple lack of information provided to practitioners (like the administrators and doctors who were unaware of the over treatment and over charging going on in their system) which all create a culture and atmosphere in which this type of situation can develop.

But, this article is just one example, you are correct in that. That being said, there are hundreds of other case studies about individual cities and practices that have shown the same situation in many places. This isn't typically caused by doctors treating for increased revenue stream, although that seems to be a large factor in McAllen, it's often caused by poor guidelines and treatment data. We see this time and time again. We also see that by improving measurement data and reporting we can have vast improvements systemically across entire health care systems. As we see in Minnesota, for example, with Minnesota Community Measurements and ICSI - Institute for Clinical Systems Improvement. (Minnesota is the healthiest state in the country and also, not coincidentally, has the best health care based on cost, coverage and outcomes.)

I'm not sure if you read:
http://www.newyorker.com/reporting/2007/12/10/071210fa_fact_gawande

But that is a cheap tool that could be easily implemented across the entire United States for very little money and would have profound impacts on health and costs as has been shown in Michigan and Spain among other places.

And if you're interested in reading more about other case studies involving treatment disparities between regions and looking for more general information about how the health care system can be reformed in this country you should really check out that Shannon Brownlee book, Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer.

She starts out with a single case study in New England somewhere, I can't remember precisely, where a man measured rates of tonsillectomies. He found that between two comparable regions in rural Vermont or something one region had some outlandishly high tonsillectomy rate: something like 200% MORE than the other area. When he presented this data to the surgeons in the high treatment area, they could hardly believe it. Because there was no guideline to follow in the treatment of tonsillitis they had simply been practicing a little more aggressively than their neighbors. They developed a system of second opinions before performing tonsillectomies and cut the rate down by 66% in the over treated area (i.e. a comparable rate of tonsillectomies to the other region).

Anyway, this is true for virtually ALL treatments that there are not national, well established guidelines for treating. This is why we need to develop these guidelines and implement them. To do that, we need measurement data from the health insurance companies and they refuse to give that data up because they think it gives them some advantage over their competition (as I took some time to explain in another post in another thread, it doesn't).

It's really easy to simplify down though. In the United States we spend 100% MORE than the next closest country on health care, per capita. We have poorer out comes than virtually ANY other industrialized country. What does this mean for us? We should be able to cut the costs down by 50% and improve our health out comes at the same time.

An analogy might be made to a manufacturing plant making cars:

Plant 1 makes Car A for 20 dollars.
Plant 2 makes Car A for 25 dollars.
Plant 3 makes Car A for 30 dollars.
Plant 4 makes Car A for 35 dollars.
Plant 5 makes Car A for 40 dollars.
Plant 6 makes Car A for 45 dollars.
Plant 7 makes Car A for 45 dollars.
Plant 8 makes Car A for 45 dollars.
Plant 9 makes Car A for 50 dollars.
Plant 10 makes Car A for 100 dollars, and it gets half as much MPG and needs 2 times as much servicing.

Plant 10 has some room for improvement. The US health care system is Plant 10. There is a lot of room for improvement.

[FascistSocialist]

Also you said:
"I like the idea of salvation by medical communities. Barack Obama and Barney Frank won't like it. They think the whole point of healthcare reform is to get single payer."

What is your problem, man! haha... jesus. This article was recommended BY OBAMA HIMSELF to his staff. This is absolutely the tact that Obama is taking to health care reform. I don't understand why you insist on making baseless attacks on the health care reform process and the individuals involved there-in.

[lexrex]

interesting analysis, kb. you said, "We have been told for decades that we can have something for nothing if only we weed out waste and fraud from this or that system. It never works out that way. Systems changes involve costs of their own ...."

exactly right. and when managed care companies sprang to life, they started weeding out the fraud and waste. but friends and family of mine report that the problem is that this newly created level of bureaucracy is raking in billions of dollars, none of which is directly involved in patient care. so now we have a problem of the weeding out costing more than the actual waste and fraud.

[lexrex]

i'd also be interested to know how much free care those docs in mcallen give away each year. maybe it's none. maybe it more than balances out the supposed waste. my guess is that they give away quite a bit.

[Mac]

Mr. Blanchard, I just think this whole thing is the same crap I've seen since following politics. To be honest, the ones who will fair well when this passes or if it does not pass...will once again be the insurance companies and the medical profession. Yes, I know we are a capitalist economy (actually a mixed one, at best), however, the real people (us) continue to get the shaft no matter what and that is why many can not afford healthcare. When you make $1,500 and most of it goes to pay high rent and bills...you barely have enough left over to eat and pay gas. I lived that way for many years and still live on a tight budget now that I make way more money because I invest and save most of it. I know that this whole thing is a shell game like everything else that goes on and I know who really benefits and who really loses everytime. You think I'm the President's blind supporter and you are wrong. I still support President Obama, but, I voted for him because I genuinely wanted to see him in office, however, I always knew things would not really change because they never have whether it has been a Republican or Democrat in office. See, that is why I don't get involved anymore in the banter because it is just a sideshow (between left and right). The real deals are made under the table by the true movers and shakers and they were never Bush or Obama or Clinton...

As my dad use to always say: "I don't want to be President, I would rather be the man who owns the President."

[KB]

Mac: have faith in the Republic! The American system doesn't encourage easy re-engineering, as you now lament. But it's not such a bad place to live, for all that, is it? I didn't vote for Barack Obama, but I am not sure that John McCain would have done any better at this. Salvation by Presidents is not what this system was designed to produce. See my next post for why this might be a very good thing.

Lex: like you, I am skeptical of the idea that we can have a lot more for a lot less. I am sure McAllen gives away a lot of free care. Medicare always shuffles a lot of expense onto private plans.

FS: I am not reassured that Obama's people are reading Gawande. I will be reassured when they focus on his recommendations. But you repeat one of the most egregious myths of healthcare: that the U.S. has poorer healthcare outcomes. The opposite is true, as I show in my next post. But again, thanks for recommending the Gawande article in New Yorker. We seem to have a point of agreement about that.

[FascistSocialist]

The article that you cite in your next post... which is a Gawande article... Gawande says that the White House and Congress are taking his suggestions in the current legislation.