[Evans] A New Model for Cutting Medical Costs


Lynn Evans, a Jackson writer and health care activist, takes issue with Gov. Haley Barbour's recent budget proposals.

Word is that Harvard Professor Dr. Atul Gawande's article on McAllen, Texas, is required reading in the White House. Published in the June 1, 2009 issue of The New Yorker, the Boston surgeon asks why McAllen's health care costs are the second highest health care costs in the nation, behind Miami. His conclusions have much to teach us about the problems with America's health care system today.

First, a little background. This year, 64.4 million Americans who are too young for Medicare will spend more than 10 percent of their pre-tax income on health care and health insurance. And that percentage is growing. Buying health insurance for their families is rapidly becoming too expensive for middle-income families, and simply impossible for low-income families. Mississippi's low median family income makes this problem even more difficult. At 43 percent, Mississippi has the lowest percentage of children covered by private insurance, and the highest percentage of children eligible for Medicaid and CHIP at 89 percent.

Although Mississippi Medicaid's health care costs for children are among the lowest in the country—about $1,800 each—Medicaid costs for adults are among the highest at almost $8,000. What Dr. Gawande found in McAllen has some clues as to why that might be.

McAllen was not always the high health care cost capital it is today. In 1992, costs were at the national average. What changed, according to McAllen doctors themselves, was overutilization. In McAllen's case, competition among medical providers did not provide better and less expensive care but rather more expensive and not necessarily better care. According to one surgeon, doctors were no longer paid to think about what may be going on with their patients but were financially rewarded for tests and procedures. An analysis of commercial insurance claims confirmed the McAllen surgeon's diagnosis; patients in McAllen got more hospital treatments and tests, more surgery, and "more of pretty much everything," Gawande said.

It turns out that more is not necessarily better for patients. In fact, it seems to be worse. According to a Dartmouth study, patients in high-cost areas around the country were less likely to receive preventive services like flu and pneumonia vaccines, waited longer to receive medical care, and were less likely to have a medical home. "They got more of the stuff that cost more, but not more of what they needed," Gawande explained.

In comparison, Rochester, Minnesota—home of the Mayo Clinic—has lower health care costs than the national average and a significantly higher quality of care. The Mayo Clinic uses a collaborative model where health care leaders are rewarded for focusing on what is best for patients and sharing expertise, rather than what is the most cost-productive business model. Their example of lessening financial incentives for individual physicians and taking collective responsibility for improving quality of care has been replicated in other cities around the nation such as Durham, North Carolina and Seattle, Washington. These medical centers are centered on not-for-profit institutions. All have higher quality of care and lower costs than the national average.

Community collaboration and accountability are the keys to providing a better quality of health care at a lower cost nationwide. Unfortunately, our current system of payments—private as well as government insurers—does not reward reducing unnecessary procedures, covering everyone, and improving the quality of patient outcomes. The national debate about access to health care—not to mention the Mississippi debate about Medicaid—must incorporate a discussion about how to promote more Mayo Clinics and fewer McAllens.

Lynn Evans is a Jackson health care activist and writer. This story was distributed by the Mississippi Forum, a nonpartisan, nonprofit, educational organization.

Previous Comments


A fresh perspective... thanks much for it.


GREAT read, very insightful, on target!



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