The health care debate is picking up now that President Barack Obama has made the expansion of care a priority. But it won’t do any good to settle on the current insurance/employer model or single-payer or individual health-savings accounts if we aren’t clear on what is driving costs.
There are two indisputable facts about American health care: It is the most expensive and wasteful in the world. That might be acceptable if we covered everyone and had better outcomes, but we are virtually alone in leaving a wide swath of the population uncovered, and we don’t rank particularly well on global quality-of-care score cards.
That’s not to say all regions of the country are wasteful. In fact, the Dartmouth Atlas of Health Care looks at Medicare and finds wide divergences in health care spending without finding a corresponding increase in quality.
As I noted in a 2007 column, “The national average for reimbursements per hospital enrollee is $6,611. In Spokane, it’s $5,429. In Miami, it’s $11,352. The average price tag per patient in New Jersey is $8,076. In Washington state, it’s $5,523.”
Dartmouth discovered that in areas with more specialists, high-tech equipment and hospital beds, outcomes can sometimes be worse but spending will almost always be higher. So much for the argument that increased competition will control costs.
In the June 1 issue of the New Yorker, author and physician Atul Gawande drills even deeper into this phenomenon to find wide disparities in spending between two Texas cities, McAllen and El Paso. McAllen was second only to Miami in health care spending per Medicare enrollee in 2006 (the latest year available); El Paso spends half as much per enrollee and its hospitals have an overall higher score on quality.
Gawande visited both cities and found that McAllen has a profit-centered model, with an impressive array of technology on hand. El Paso hews more closely to a patient-centered model and is behind the technology curve.
At dinner one night, Gawande and six McAllen doctors discussed the spending disparities. How about defensive medicine to ward off malpractice lawsuits? Both cities are subject to a strict state cap on malpractice awards and lawsuits have dropped.
After discarding other possibilities, a surgeon finally said: “There is overutilization here, pure and simple.”
Doctors were driving up costs with extra tests, services and procedures.
To help control costs, we need El Paso and Spokane to be the model. Unfortunately, it’s the patients-as-profit- centers model of Miami and McAllen that are proliferating.
Alien influence. Any discussion about health care inevitably circles around to the influence of illegal immigrants on health care costs. The charge is that health care is more expensive in this country because we have more illegal immigrants getting free care at emergency rooms. But El Paso’s health care costs are about average and far below those of McAllen, Texas. Both are border towns.
In fact, studies show that while illegal immigrants pose problems for particular areas of the country, the overall impact on health care spending is about 2 percent.
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Time for a break…
I'm taking a few days off; I'll be back and blogging on Tuesday. Let me know what I miss, and I'll catch up then. Happy summer, everyone!