The challenges of health care

Yesterday I read a fascinating article written by Atul Gawande, an American surgeon who wrote in the New Yorker magazine on cost control in the U.S. medical system.  His premise is that independently of provider (Government, HMO, other) the issue is about the type of incentive given to the medical establishment. 

His layman analogy was that instead of paying a contractor to build your house you paid the trades; plumbers and electricians on the number of faucets and outlets in your house – the outcome is obvious, too many faucets and electrical outlets.

Gawanda focused on what the most expensive and most cost cautious providers were doing.  His finding (as the above analogy indicates) that the compensation system in Medicare is skewed towards quantity and not quality.  What makes his analysis interesting is that in Texas the cost difference per participants in two regions was dramatically different:  $7k for El Paso and $15 for McAllen.  It is noteworthy that we are talking Medicare here, not HMO or other forms of insurance.  The payer was the same in both cases, with very similar health concerns (all that TexMex goodness…).  As an aside Gawanda indicates that in 1992, both regions had similar costs per participant of $4k.  Something happened in McAllen or El Paso or both!

Read the article it’s here.

The overall issue of interest is not the story itself, but rather the debate is about what healthcare is about.  Places like El Paso and the Mayo Clinic view their role to be greater than just providing specific services, but considering the patient as a whole (we’re not talking touchy feely stuff here, but hard core analysis of what make health care work, and what is meant by good health care, as Mr. FitN often points out “More is not always better, some time less is more”).  The problem is that tests and procedures carry their own additional risk.  Medicine is not like a bigger car.

The problem is not isolated to the U.S. somewhat as a parable: In 2005 one of Canada’s premier teaching hospitals had budgeted 700 stents – this popular and non-invasive procedure (instead of “cracking the chest”) became the preferred method of reducing angina and other blood flow related heart procedures.  Part way through the year, the Hospital’s board became aware that their stents budget was inadequate!  At the end of the year instead of 700 stents the cardiology department had used nearly 1,400 at an additional cost of $420,000. 

The most expensive piece of medical equipment is a doctor’s pen. And, as a rule, hospital executives don’t own the pen caps. Doctors do.

The surgeons had decided to install two stents instead of one.  The board’s reaction was to ask these surgeons on what study they had based this decision.  It turns out there was no study.  It was an unspoken agreement that two was better than one.  The implication is that again the method by which healthcare is delivered is somewhat irrelevant; what is important is to control cost and optimize patient well being (by the way it turns out that installing two stents instead of one has no impact on the patients’ well being or incidence of return to the hospital)..