Cost Conundrum: Small Area Variation Writ Large

Atul Gawande has once again put his finger, or I should say his keyboard, on a fundamental truth of American medicine. In “The Cost Conundrum: What a Texas town can teach us about health care, “ Gawande touches down in McAllen, Texas, where the cost of medical care is over twice as high as in Rochester, MN (Home of Mayo Clinic), or in nearby El Paso, TX. The only place in America where Medicare pays more for health care is Miami.

Compared to El Paso, McAllen residents have 50% more specialist visits when they are critically ill, 60% more cardiac stress tests, twice as many bypass operations, three times as many nerve conduction studies, and six times as many home health visits. McAllen is at the very bottom (left) of Texas on the Mexican border. I urge you to go to the interactive map at the Dartmouth Atlas and click on McAllen - it’s one of the darkest blotches on the map.

Gawande took doctors out to dinner. They complained about rapacious lawyers, but lawsuits have declined dramatically since malpractice reform. They complained that their patients were more obese or sedentary – but the underlying illness of the population is no different than El Paso. They crowed about their better quality of care- but their hospitals are below national average in quality measures. Finally, one surgeon told truth to the group:

“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.

Gawande was on an NPR call in show earlier today, and Peter Orszag, the director of the Office of Management and Budget, blogged about this article earlier today. This is an important contribution to the discussion on health care reform. It’s nice to see it getting this attention.