Posted byon May 28, 2009 at 11:25 AM EST
I’ve never been to McAllen, Texas, but after reading Atul Gawande’s essay about this border town in the most recent New Yorker, it sounded very familiar.
As I have written and talked about before, one of the biggest signals of inefficiency in American health care is the massive regional variation in cost and health outcomes. As the Dartmouth Health Atlas has made clear, medicine is practiced differently in different regions across the country, different cities, and even among different hospitals in the same city. And yet the higher cost areas and hospitals don’t generate better outcomes than the lower-cost ones. The result is an estimated $700 billion a year spent on health care that does nothing to improve patient health, but subjects you and me to tests and procedures that aren’t necessary and are potentially harmful – not to mention wasteful.
McAllen, Texas is the poster child for this sort of variation. As Gawande writes:
McAllen has another distinction, too: it is one of the most expensive health-care markets in the country. Only Miami—which has much higher labor and living costs—spends more per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average. The income per capita is twelve thousand dollars. In other words, Medicare spends three thousand dollars more per person here than the average person earns.
Gawande goes on to explain that despite these high costs, the outcomes in McAllen are not significantly better than peer cities such as El Paso or the national average.
The McAllens of our country present a real challenge and opportunity for health care reformers. The challenge is to reconfigure the incentives and norms in our health care system so that we promote better medicine, not just more medicine. The opportunity presented by the nation’s McAllens is that we can realize significant savings by bringing these towns more in line with the more efficient ones – without compromising the quality of care. This is the thinking behind the Recovery Act’s unprecedented investments in health IT, patient-centered research, and prevention and wellness, as well as our ongoing efforts to reform the health care system. Among the reasons we are committed to passing health care reform this year is that, should Gawande return to McAllen in a decade’s time, we want him to find a community that is not only healthier, but also wealthier from spending less on health care.
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