I’ve got two follow-ups to share with you regarding Atul Gawande’s New Yorker piece about healthcare costs in the US (kottke.org post). In the Wall Street Journal, Abraham Verghese argues that in order for a healthcare reform plan to be successful, it has to include cost cutting.
I recently came on a phrase in an article in the journal “Annals of Internal Medicine” about an axiom of medical economics: a dollar spent on medical care is a dollar of income for someone. I have been reciting this as a mantra ever since. It may be the single most important fact about health care in America that you or I need to know. It means that all of us — doctors, hospitals, pharmacists, drug companies, nurses, home health agencies, and so many others — are drinking at the same trough which happens to hold $2.1 trillion, or 16% of our GDP. Every group who feeds at this trough has its lobbyists and has made contributions to Congressional campaigns to try to keep their spot and their share of the grub. Why not? — it’s hog heaven. But reform cannot happen without cutting costs, without turning people away from the trough and having them eat less. If you do that, you have to be prepared for the buzz saw of protest that dissuaded Roosevelt, defeated Truman’s plan and scuttled Hillary Clinton’s proposal.
In Gawande’s example, what Verghese is saying is that you can’t just make McAllen’s healthcare system adopt an El Paso type of system without a whole lot of pain.
Gawande addressed some of the criticisms of his article on the New Yorker site. One of the major criticisms was that McAllen’s higher costs were associated with higher levels of poverty and unhealthiness:
As I noted in the piece, McAllen is indeed in the poorest county in the country, with a relatively unhealthy population and the problems of being a border city. They have a very low physician supply. The struggles the people and medical community face there are huge. But they are just as huge in El Paso — its residents are barely less poor or unhealthy or under-supplied with physicians than McAllen, and certainly not enough so to account for the enormous cost differences. The population in McAllen also has more hospital beds than four out of five American cities.