Dr. Gawande explores the rationale for our irrational healthcare spending

By ACSH Staff — May 11, 2015
Why do healthcare expenditures in the U.S. tower over those of other wealthy countries? And why are the health benefits we receive not commensurate with all those billions spent? Dr. Atul Gawande has some thoughts on this in The New Yorker.

stethoscope-1586565591-190x155In the current New Yorker, Dr. Atul Gawande, well-known expounder of healthcare issues and endocrine surgeon at Harvard, discusses some of the more outrageous exploitations of healthcare economics in his lengthy article, Overkill.

The genesis of this re-exploration of the costs of America s medical care was his 2009 piece in the same journal, The Cost Conundrum, in which he compared two cities in Texas as to their Medicare expenditures. He found, to his expressed amazement, that one town McAllen had vastly greater expenditures than the comparator town, El Paso, on the Mexican border. He analyzed troves of data to expound on where these expenditures differed and what the residents were getting for their monies, respectively. To sum up, he found that a major fraction of the McAllen Medicare payments were wasted, unnecessary, or simply fraudulent. The current essay re-visited these towns.

His 2009 conclusions were these:

McAllen s doctors were ordering more of almost everything diagnostic testing, hospital admissions, procedures. Medicare patients in McAllen received forty per cent more surgery, almost twice as many bladder scopes and heart studies, and two to three times as many pacemakers, cardiac bypass operations, carotid endarterectomies, and coronary stents. Per-capita spending on home-health services was five times higher than in El Paso and more than half of what many American communities spent on all health care. The amount of unnecessary care appeared to be huge.

What explained this? Our piecework payment system rewarding doctors for the quantity of care provided, regardless of the results was a key factor. The system gives ample reward for overtreatment and no reward for eliminating it.

His ostensible goal for the re-visit was to elucidate whether, and to what extent, changes emanating from the Affordable Care Act (ACA) or otherwise (e.g., rooting out fraud) had led to reductions in the insidious habitual overuse of medical resources, and if these changes affected low-use and high-volume areas similarly.

He found that, while Medicare expenses had flattened throughout the country, even moreso in McAllen: McAllen has been changing its ways. Between 2009 and 2012, its costs dropped almost three thousand dollars per Medicare recipient. Skinner projects the total savings to taxpayers to have reached almost half a billion dollars by the end of 2014.

His analysis expounded in detail on the harms that come with overuse of medical testing, including redundant tests, and defensive medicine, and overdiagnosis (finding conditions or abnormalities that, while real, would never interfere with life or normal activities and would have been better left alone) which are not only financially wasteful, but put patients lives and health in actual dangers, not from illness, but from the healthcare system itself.

ACSH s Dr. Gil Ross had this comment: We here at ACSH have been pointing out many of these issues frequently, focusing for instance on the harm/benefit ratio as applied to routine screenings for breast cancer with mammograms and prostate cancer with PSA blood tests. We have found, in agreement with experts and expert panels, that these tests while certainly increasing the diagnoses of breast cancer and prostate cancer, respectively, do a net harm to the public by finding many more incidental abnormalities than actual dangerous early lesions. The issues of just in case tests, basically defensive medicine, will never go away as long as there are predatory lawyers and inadequate tort reform. But it was gratifying to read about the salutary decrease in healthcare expenditures Dr. Gawande and his colleagues found in those Texas towns, possibly based upon his earlier essay which did cast a spotlight on the issues and the regions themselves.

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