Tuesday, September 22, 2009


Medicare costs and their regional variation are crucial issues which we must understand and address. With all due respect however, you are wildly off the mark when you say:

"In other words, the individual, personal Life Decisions of "The Poor" are a critical component of WHY they are "Poor"; and why they remain so. As a result of their Life Decisions... they have positioned themselves to require more and expensive Health Care.... There are individuals who are capable of making 'good decisions', yet simply CHOSE NOT TO."

In order to make a little progress on these issues, I think we're not only going to have to deal with why this conclusion is wrong, but also why you reach it intuitively. First, why it is wrong:

From THE COST CONUNDRUM, A new yorker article by Atul Gawande, associate professor of surgery at Harvard Medical School:

"McAllen (Texas) calls itself the Square Dance Capital of the World. “Lonesome Dove” was set around here... McAllen has another distinction, too: it is one of the most expensive health-care markets in the country...

In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average.

From the moment I arrived, I asked almost everyone I encountered about McAllen’s health costs—a businessman I met at the five-gate McAllen-Miller International Airport, the desk clerks at the Embassy Suites Hotel, a police-academy cadet at McDonald’s. Most weren’t surprised to hear that McAllen was an outlier. “Just look around,” the cadet said. “People are not healthy here.” McAllen, with its high poverty rate, has an incidence of heavy drinking sixty per cent higher than the national average. And the Tex-Mex diet has contributed to a thirty-eight-per-cent obesity rate." (my emphasis)

So, like your's, the commonly held view around McAllen was that health care costs were higher because of the high poverty rate and a population which "have positioned themselves to require more and expensive Health Care" (your conclusion). But is that really true? Back to the article:

"Yet public-health statistics show that cardiovascular-disease rates in the county are actually lower than average, probably because its smoking rates are quite low. Rates of asthma, H.I.V., infant mortality, cancer, and injury are lower, too. El Paso County, eight hundred miles up the border, has essentially the same demographics. Both counties have a population of roughly seven hundred thousand, similar public-health statistics, and similar percentages of non-English speakers, illegal immigrants, and the unemployed. Yet in 2006 Medicare expenditures (our best approximation of over-all spending patterns) in El Paso were $7,504 per enrollee—half as much as in McAllen. An unhealthy population couldn’t possibly be the reason that McAllen’s health-care costs are so high. (Or the reason that America’s are. We may be more obese than any other industrialized nation, but we have among the lowest rates of smoking and alcoholism, and we are in the middle of the range for cardiovascular disease and diabetes.)" (again, my emphasis)

Now why then, if not on account of the "bad choices" is there such a huge disparity between Medicare expenditures in McAllen, as opposed to El Paso? We continue:

"And yet there’s no evidence that the treatments and technologies available at McAllen are better than those found elsewhere in the country. The annual reports that hospitals file with Medicare show that those in McAllen and El Paso offer comparable technologies—neonatal intensive-care units, advanced cardiac services, PET scans, and so on. Public statistics show no difference in the supply of doctors. Hidalgo County actually has fewer specialists than the national average."

So why could Medicare costs differ so dramatically? At a dinner meeting with some of the doctors and administrators from a McAllen hospital, one doctor finally says:

" “Come on,” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures.

The surgeon came to McAllen in the mid-nineties, and since then, he said, “the way to practice medicine has changed completely. Before, it was about how to do a good job. Now it is about ‘How much will you benefit?’ ” "

The narrative continues:

"To determine whether overuse of medical care was really the problem in McAllen, I turned to Jonathan Skinner, an economist at Dartmouth’s Institute for Health Policy and Clinical Practice which has three decades of expertise in examining regional patterns in Medicare payment data.

The Medicare payment data provided the most detail. Between 2001 and 2005, critically ill Medicare patients received almost fifty per cent more specialist visits in McAllen than in El Paso, and were two-thirds more likely to see ten or more specialists in a six-month period. In 2005 and 2006, patients in McAllen received twenty per cent more abdominal ultrasounds, thirty per cent more bone-density studies, sixty per cent more stress tests with echocardiography, two hundred per cent more nerve-conduction studies to diagnose carpal-tunnel syndrome, and five hundred and fifty per cent more urine-flow studies to diagnose prostate troubles. They received one-fifth to two-thirds more gallbladder operations, knee replacements, breast biopsies, and bladder scopes. They also received two to three times as many pacemakers, implantable defibrillators, cardiac-bypass operations, carotid endarterectomies, and coronary-artery stents. And Medicare paid for five times as many home-nurse visits. The primary cause of McAllen’s extreme costs was, very simply, the across-the-board overuse of medicine."

Finally the real reason for the drastically high Medicare expenses in McAllen begins to emerge - and it has nothing whatsoever to do with poor people making bad decisions. A couple of final excerpts:

"Health-care costs ultimately arise from the accumulation of individual decisions doctors make about which services and treatments to write an order for. The most expensive piece of medical equipment, as the saying goes, is a doctor’s pen. And, as a rule, hospital executives don’t own the pen caps. Doctors do.

Brenda Sirovich, another Dartmouth researcher, published a study last year that provided an important clue. She and her team surveyed some eight hundred primary-care physicians from high-cost cities (such as Las Vegas and New York), low-cost cities (such as Sacramento and Boise), and others in between. The researchers asked the physicians specifically how they would handle a variety of patient cases. It turned out that differences in decision-making emerged in only some kinds of cases. In situations in which the right thing to do was well established—for example, whether to recommend a mammogram for a fifty-year-old woman (the answer is yes)—physicians in high- and low-cost cities made the same decisions. But, in cases in which the science was unclear, some physicians pursued the maximum possible amount of testing and procedures; some pursued the minimum. And which kind of doctor they were depended on where they came from.

Sirovich asked doctors how they would treat a seventy-five-year-old woman with typical heartburn symptoms and “adequate health insurance to cover tests and medications.” Physicians in high- and low-cost cities were equally likely to prescribe antacid therapy and to check for H. pylori, an ulcer-causing bacterium—steps strongly recommended by national guidelines. But when it came to measures of less certain value—and higher cost—the differences were considerable. More than seventy per cent of physicians in high-cost cities referred the patient to a gastroenterologist, ordered an upper endoscopy, or both, while half as many in low-cost cities did. Physicians from high-cost cities typically recommended that patients with well-controlled hypertension see them in the office every one to three months, while those from low-cost cities recommended visits twice yearly. In case after uncertain case, more was not necessarily better. But physicians from the most expensive cities did the most expensive things."

The L.A. Times article on which you base your conjecture is itself based on data from the Dartmouth Institute for Health Policy and Clinical Practice, whose publications paint an entirely different picture (from yours) of why Medicare costs differ enormously from region to region. As a matter of fact, if you visit the site, you will find several of Dr. Gawande's articles listed there - including this one.

So the answer is pretty clear. Medicare costs differ from region to region - not because of differences in the income or "life styles" of local populations - but rather, the differences in the approach by medical professionals and administrators in different areas towards how and how much health care is to be delivered. Furthermore the choice of McAllen as a case study is particularly significant, since another commonly held view is that doctors prescribe more tests and procedures to avoid malpractice complaints, and Texas is one of the few states in the union which caps non-economic damages in malpractice suits.

I think we're going to get into trouble if we start making broad assumptions about health care reform by using stereotypes. When you proceed on the assumption that income is a central determinant in how much care an individual is going to require in later life, what you are really doing is just laying the blame for high costs on "poor" people - while ignoring the real problem. Any free society is always going to have its poor and rich - and everything in between. There isn't much we can do about that. But we can, in the real world, develop more effective guidelines for doctors to rely on when considering treatment options. This concept, by the way, is precisely why the original reform bill proposed by Democrats mandates the creation of an advisory board to do that.


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