Regional variation, Gawande - Obama Health Reform and the Sunday New York Times

“There is disturbing evidence that many doctors do a lot more than is medically useful — and often reap financial benefits from over-treating their patients. No doubt a vast majority of doctors strive to do the best for their patients. But many are influenced by fee-for-service financial incentives and some are unabashed profiteers.

A glaring example of profligate physician behavior was described by Atul Gawande in the June 1 issue of The New Yorker. (His article has become must reading at the White House.) Dr. Gawande, a Harvard-affiliated surgeon and author, traveled to McAllen, Texas, to find out why Medicare spends more per beneficiary there than in any other city except Miami.

The reason for McAllen’s soaring costs, some doctors finally admitted, is over-treatment. Doctors perform extra tests, surgeries and other procedures to increase their incomes.

Dr. Gawande’s reporting tracks pioneering studies by researchers at Dartmouth into the reasons for large regional and institutional variations in Medicare costs. Why should medical care in Miami or McAllen be far more expensive than in San Francisco? Why should care provided at the U.C.L.A. medical center be far more costly than care at the renowned Mayo Clinic?

After adjusting for differences in health, income, medical price and other factors, the Dartmouth researchers’ overall conclusion is that the more costly areas and institutions provide a lot more tests, services and intensive hospital-based care than the lower cost centers. Yet their patients fare no better and often fare worse because they suffer from the over-treatment.

The Dartmouth group estimates that up to 30 percent of Medicare spending is wasted on needless care.

Editorial, “Doctors and the Cost of Care,”, June 14, New York Times

So reads parts of the lead editorial in Sunday’s in the New York Times.

What amazes me about the editorial is that the editorial writer swallowed the Dartmouth Institute Institutes’ data and Doctor Gawande’s interpretation of the reasons behind practice variation hook, line, and sinker without mentioning that local business conditions in various parts of the country – the cost of doing business, the demands and sickness status of of the local populace, the mix of wealth and poverty, the cultures of various regions, the number of immigrants and uninsured – may have a lot more to do with practice variation than raw greed by hospitals and doctors.

The editorial also fails to mention that some of the highest costs in the country are in New York City and Boston – the pantheons of liberalism and Obama supporters and advisors.

Still, the Times editorial and a series of other Obama-reform articles satisfy me greatly because they mirror precisely what I’m saying in my book “Obama, Doctors, and Health Reform: A Doctor Assesses Odds for Success; The Health System, from the Top-Down to the Bottom-Up, Through Lens of Cultural Complexity (Iuniverse, Inc, to be released in June).

The Times’ articles say that our health system and its reform is, well, complex, and that our pluralistic health system shapes the system.

Therefore, “fixing” the system, 1/6 of our economy, entails turning our culture upside down, which is not easy given our penchant for individualism and distrust of sweeping government change and fear we will lose our present private plans, which cover 70% of people.

A Run-Down of this Sunday’s Health Reform Pieces

Here’s a rundown on today’s New York Times’ articles with The Times titles in bold print, their word-for-word assessments of their own articles in quotes, and my comments in italics.

• Many in Congress Hold Stakes in Health Industry - “As President Obama and Congress intensify the push to overhaul health care, financial reports show lawmakers with a say have heavy investments in the industry.”


Comment- Not only their own personal investments, but money to be garnered from lobbyists and votes to be gathered from their constituents.

Editorial: Doctors and the Cost of Care, “As the debate over health care reform unfolds, policy makers and the public need to focus more attention on doctors and the huge role they play in determining the cost of medical care — costs that are rising relentlessly. Doctors largely decide what medical or surgical treatments are needed, whether it will be delivered in a hospital, what tests will be performed, and what drugs will be prescribed or medical devices implanted.”


Comment: This seems clear enough. High costs stem from doctor greed. There are other factors as well. Defensive medicine,” high malpractice premiums , as much as $150,000 for neurosurgeons or obsteticians, fear of being sued lest you perform every diagnostic test known to patients and their lawyers, and the public and medical perceptions that CT and MRI scans, heart caths and stents, and joint replacement represent the standard of care. Furthermore. according a Kaiser poll, 67% of patients felt they did not receive enough treatment, and only 16% felt they were over-treated.

• Health Plan May Mean Payment Cuts – “The White House said Saturday that President Obama intended to pay for his health care overhaul by cutting more than $200 billion in expected reimbursements to hospitals over the next decade – a proposal that is likely to provoke a backlash from struggling medical institutions across the country.”

Comment - As indeed it will. Over 1/3 of hospitals are losing money, and many are the largest employer in any given town or city. Health care has created 4 million jobs over the last decade, while employment has been flat in other sectors.

• Following the Money in the Health Care Debates – “Congress appears readt to confront the nation’s most contentious issue – health care reform – and arguments will fill the air in coming moths. Much of the discussion so far has focused on President Obama’s proposal for a government-sponsored halth plan that he says will reduce costs. Insurers and doctors argue it will limit choice. The size and complexity of the issue are daunting. To understand what’s going on, you need to follow the money.”

Comment – This says it better than my book.

• Obama’s Difficult Choices in Medicare Spending. “Obama, by taking seriously Medicare expenditures threatening to crush the federal budget, yet the Obama administration is proposing that we start by spending more now we can spend less later. This runs the risk of becoming the new voodoo economics. If we can’t realize significant savings in health costs now, don’t expect savings in the future later.”

Comment - Most observers believe heavy investments now in unproved theories – namely in prevention, health information technologies, and coordinated comprehensive primary care – may be the right thing to do, but will not result in significant savings in the near term.

Where I Agree with The Times

I agree with much of what the Times’ writers and contributors say, especially the bits about the money sacrifices for hospitals and doctors (a public plan would likely result in a 20% hit in revenues and incomes); many legislators are in a clash all by themselves (with heavy personal and career investments in stocks, campaign contributions, and voter resistance); and that “all interest groups” support universal coverage ( to oppose would be cruel-hearted, and besides universal coverage translates into billions and billions of new payments for everyone),

Where I Disagree

I do not agree with the unquestioned acceptance of the Times of the Dartmouth Institute data , lack of sophistication in interpreting that data, and hypocrisy of the Times in accepting practice variation as a main cause of high costs.

In fact, the Times' naivete astonishes me. The Times and the Obama administration blithely attribute high costs to avaricious economic behavior on the part of hospitals and doctors, whereas these variations can be just as easily attributed to local costs of doing business, and wealth, poverty, and cultural differences in the populations being served. For example,costs of care in the New York City metroplex are among the highest in the land, not because of hospital and doctor greed, but because of mix of wealthy and poverty populations, he high costs of doing business, all of which results in health costs.

Alternatives to Obamacare

Finally, I am perplexed the Times never mentions alternatives to government programs - growth of wellness programs and worksite clinics in industry, the leveling of tax deductions for individuals and corporate employees, portabiliyt of plans across state lines, and the emergence of the consumer-driven movements with 20% of the private market now availing themselves of health savings and flexible savings accounts in high deductible plans, and power of reducing costs by having patients decide how to spend their hard-earned tax-free money rather than having the government decide for them.

Increasing Wariness

Americans are growing increasingly wary of Medicare cuts because of what they portend for access to care with attendant waiting lines and looming tax increases to offset inevitable massive federal debts.Obama’s proposal to cut $313 billion in Medicare in addition to his $635 billion “down-payment” to expand coverage are causing people to think and blink twice. “Payment cuts are not reform,: says Rich Umbenstock, president of the American Hospital Association, and Patrick Duval, governor of Massachusetts, says, “Universal coverage without access is meaningless.”

In any event, it is gratifying to see the New York Times is coming around to a more realistic view of the complexities, contradictions, and paradoxes of reform.