In the June 1 issue of the New Yorker, Dr. Atul Gawande investigates “The Cost Conundrum”: why some cities in the USA have much higher medical costs per person, and often poorer outcomes. He lands in the dusty border town of McAllen, Texas, located in the lowest income county in the US. McAllen also has one of the most expensive health care systems in the country, second only to Miami. In 2006, Medicare spent $15,000 per enrollee here, twice the national average. Despite the poverty, McAllen offers gleaming modern medical facilities. But health outcomes are relatively poor, compared even to nearby El Paso with similar demographics.
Gawande quickly identifies the explanation: over-treatment and under-prevention. Doctors order unnecessary tests and treatments, while failing to encourage simple prevention, like immunizations or monitoring of diabetics. Since every procedure carries some risks, over-treatment means poorer outcomes. Motivation for over-treatment is pretty obvious too: doctors make greater profits, especially when they build their own clinics. And there’s no money in prevention. So, here’s the real mystery: why don’t all doctors over-treat and under-prevent?
Places like Rochester Minnesota, dominated by the Mayo Clinic; Seattle, Washington; and Durham, North Carolina provide world-class treatment at costs below the national average. Doctors in such places pursue a more collaborative approach to treatment, sharing information and equipment, tackling common problems like error prevention, and sometimes sharing reimbursements. At Mayo in particular, where doctors are on salary, whole teams of doctors evaluate patients.
Why the difference? It comes down to local history and norms of behavior. In McAllen, apparently, some fifteen years ago the lure of profit overwhelmed traditional physician concern with simply providing good service. Gawande sees an alarming trend in this direction, potentially stymieing efforts to reform health care.
Meanwhile, Dr. David Zakim of the Institute for Digital Medicine has developed a computer program and database for bringing state-of-the-art medical information to bear on individual cases. A central feature is a directed interactive interview with a patient; that is, as the patient types in answers to questions, the program brings up further related questions. The program–now being tested in hospitals in Stuttgart, Germany–helps doctors identify likely diagnoses and recommended tests and treatments. Even more important, the program enables patients with chronic illnesses like diabetes or heart disease to report their condition online, catching problems early and cutting unnecessary visits to the hospital. In short, the digital approach fosters better care at lower cost. It also helps set norms for appropriate treatment, restraining over-treatment and supporting prevention.
In Unsafe at Any Speed (1965), Ralph Nader pointed to a system failure in American automobiles and highways. That is, certain features of cars and roads were statistically more likely to cause injuries and deaths. Over the opposition of the auto industry, which preferred to blame individual bad drivers, Nader advocated a system solution: national legislated mandates and incentives to engineer for safety.
American medicine suffers from a system failure. As long as we pay doctors for piecework, patient by patient, procedure by procedure, profit motives will tend to overwhelm good medicine. The alternative is collaborative medicine, which measures and rewards success according to good statistical outcomes–such as hospital infections avoided, medication errors prevented, or diabetics trained to eat healthier diets. Digital Medicine and hospitals like Mayo succeed because they foster collaboration, among doctors–including the experts who feed information into the Digital database–and between doctors and patients. These are system approaches.
The Obama Administration is struggling to include in its plan a public insurance option to compete with private insurance. Meanwhile, liberals demand “single payer.” Yet as Gawande points out, McAllen relies chiefly on Medicare and Medicaid, making it already de facto single payer. Whatever the final shape of Obama’s plan, it will fail unless it redirects incentives toward collaborative medicine.
I send Econamici–occasional emails with interesting attachments or links–to friends who are economists or care about economic issues. –Polly Cleveland