A New Yorker magazine article that examined why health care spending in McAllen, Texas was so much greater than elsewhere in the nation has captured attention here and prompted discussion about cost disparities that exist even within Kansas.
For example, per capita costs for Medicare in Wichita are significantly greater than they are in Kansas City and some see at play the same dynamics described in the New Yorker article.
The nine-page article, “The Cost Conundrum,” by Dr. Atul Gawande, a surgeon and associate professor at Harvard Medical School, concluded that, “the primary cause of McAllen’s extreme costs was, very simply, the across-the-board overuse of medicine.”
McAllen is a border town where, according to the article, the average per capita income was $12,000 a year. Yet Medicare costs in the city were about $15,000 per patient per year.
Gawande found that there was a culture among the city’s doctors and other providers that encouraged more tests and procedures. But more medical interventions did not result in healthier people.
Gawande reported that in cities such as Rochester, Minn. and Grand Junction, Colo., medical spending was far less, fewer tests and procedures were done, but results for patients were better.
His comparisons were based on Medicare data compiled by the Dartmouth Institute for Health Policy and Clinical Practice.
“When you look across the spectrum from Grand Junction to McAllen — and the almost threefold difference in the costs of care — you come to realize that we are witnessing a battle for the soul of American medicine,” Gawande wrote. “Somewhere in the United States at this moment, a patient with chest pain, or a tumor, or a cough is seeing a doctor. And the damning question we have to ask is whether the doctor is set up to meet the needs of the patient, first and foremost, or to maximize revenue.”
The article, published June 1, got greater currency after the New York Times reported that President Obama considered it required reading.
U.S. Department of Health and Human Services Secretary Kathleen Sebelius cited it during a recent speech at Harvard’s John F. Kennedy School of Government.
In Kansas, the article has been pored over by hospital administrators, doctors, and others.
“I loved it,” said Ron Whiting, who runs the Wichita Business Coalition on Health Care. “I sent it to everybody I knew. It’s a terrific commentary on the way that medicine is practiced, one that ought to make us all think real hard about the economics of health care and what we expect in terms of standard of care.”
Whiting said the Dartmouth data showed that Wichita’s health care costs were considerably higher than those in Kansas City.
Medicare expenditures in Kansas City, for example, were in the 38th percentile; Wichita’s in the 59th percentile. McAllen’s were in the 99th percentile.
The average Medicare per-person expenditure in Kansas City was $7,265; in Wichita, $8,204.
“That’s not surprising,” Whiting said. “Our employers say their costs in Wichita are higher than what they pay at their other plants around the country. It’s been that way for a long time.”
Other Kansas rankings by percentile and average expenditure:
• Newton – 8th, $5,511
• Topeka – 16th, $6,130
• Emporia – 19th, $6,304
• Great Bend – 28th, $6,821
• Lawrence – 29th, $6,875
• Salina – 35th, $7,162
• Overland Park – 36th, $7,169
• Pittsburg – 38th, $7,255
• Olathe – 46th, $7,646
• Hutchinson – 57th, $8,127.
Newton Medical Center’s Chief Executive Officer Steve Kelly attributed the hospital’s 8th-percentile showing to several factors similar to those Gawande cited at the Mayo Clinic in Rochester and in Grand Junction, where costs were significantly lower and outcomes better than in McAllen.
“The biggest thing, I think, is that we’re a nonprofit, community-based hospital that’s dedicated to being good stewards of our resources,” Kelly said. “Now, we need to make a profit, but we don’t have to make a profit. The motivation to make a profit is so that we can expand services where needed or replace equipment. We don’t have stockholders we have to report to.”
Other factors:
• ”We have a very strong family-practice care system,” Kelly said. “Our family practice physicians explore a lot of different ways to care for patients, rather than just automatically doing expensive testing.”
• “All of our physicians are on one campus, so if you have the need for a specialist, basically, they’re right there,” he said. “It’s not like you’re going to be referred to someone across town. There’s a very collective approach to providing care.”
• Hospital officials meet regularly with representatives of the local health department and the area’s nursing homes, looking for ways to increase efficiencies.
Some in Wichita see a medical culture there that perhaps is closer to the McAllen model.
“For a lot of us, that’s the rub: Where do you draw the line between medicine as a good and as a business?” Whiting said. “McAllen certainly falls at the far end of the spectrum of what happens when you look at health care strictly as a business.
“But, you know, Wichita has a lot of specialty hospitals and a system that’s very oriented around fee for service, so you tend to see a lot of behavior that results in financial profit,” he said. “I don’t mean that to disparage anybody. I’m just saying that’s the way the system is designed. The article isn’t a dig at doctors; it’s really a dig at the system.”
Jon Rosell, executive director at the Medical Society of Sedgwick County, noted that the Wichita Business Coalition on Health Care is trying to address the issues cited in the article.
“We just celebrated our first-year anniversary a couple weeks ago,” Rosell said. “So we’ve been at this awhile, since before the article came out, certainly. These issues have been taking shape in our community for quite some time now.”
The Medical Society of Sedgwick County is an active member of the coalition. Other members are employers, consumers, and providers.
“The coalition is based on the belief that the best chance for resolving these issues is when the participants in a medical region can get together, come to an understanding as to what the issues are, agree upon a certain direction, and then work in collaboration and full transparency to get there.”
Gawande’s article endorsed a local approach as part of the way to deal with the problem of soaring costs paired with weak outcomes.
“McAllen and other cities like it have to be weaned away from their untenably fragmented, quantity-driven systems of health care, step by step,” he wrote. “And that will mean rewarding doctors and hospitals if they band together to form Grand Junction-like accountable-care organizations, in which doctors collaborate to increase prevention and the quality of care, while discouraging overtreatment, undertreatment, and sheer profiteering.”
-Dave Ranney is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at dranney@khi.org or at 785-233-5443, ext. 128.