'What Can We Learn From McAllen, Texas?' by Robert Seifert

There is a three-fold variation in per capita spending on Medicare patients across 300-plus health care markets in the United States, according to the Dartmouth Atlas of Health Care. Lurking in that variation lie important clues to reducing the overuse of unnecessary services, a key to limiting the growth of health care spending. Surgeon-journalist Atul Gawande traveled to McAllen, Texas to investigate those clues and wrote about it in the June 1 New Yorker magazine.

McAllen had the second highest spending per Medicare beneficiary in the country in 2006 – $14,946, behind only Miami. Gawande uses data to dismiss explanations for the excessive spending offered by area physicians – an unhealthy population, better services, the threat of malpractice suits – and points out that in El Paso, a city with similar demographics and public health statistics, spending is half of what it is in McAllen. He argues (and several of the doctors he speaks with agree) that McAllen’s cost disparity is largely the result of a culture of medical practice that overuses intensive, expensive technologies and services.

Dartmouth researchers and others have compellingly argued that, in medicine, more is not necessarily better.

Gawande cites the example of Rochester, Minnesota, home of the Mayo Clinic, which delivers excellent care for about $8,000 per Medicare patient less than McAllen. The difference, he says, is that the Mayo model is structured to create incentives for physicians to coordinate their care in the interest of patients, rather than to deliver the maximum number of services. In contrast, Gawande discovers a culture in McAllen that views medicine as a revenue generator. This is the essence of what Gawande calls the “battle for the soul of American medicine… 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.”

One striking feature of Gawande’s conversations with doctors and administrators in McAllen was that none of them were aware of how much higher their health care spending was than similar communities’, let alone what practices were driving that variation. This argues for the basic need for information, on spending and best practices, being easily and routinely available to people making decisions about health services that, in the aggregate, shape the practice patterns of a community. Ultimately, Gawande argues that we need delivery and payment systems that encourage the coordination of care, focus on quality and accountability, and discourage overuse, underuse and profiteering. This will go a long way to determining – in Massachusetts and the nation – whether we can meet the challenge of controlling costs, in order to sustain the improvements we want in coverage, access and quality.

Robert Seifert is a Senior Associate at the Center for Health Law and Economics, University of Massachusetts Medical School