Small Texas town becomes focus of talk on mega-spending.

A recent article in The New Yorker about wasteful medical spending -- complete with interviews of local physicians and healthcare administrators -- garnered attention from Congress, the Oval Office, and others across the country. Here’s the rundown on what the article said and how some experts responded.

Physicians and Others Offer Reasons for Costs

The article by New Yorker staff writer Atul Gawande (a veteran of the Clinton administration’s health reform efforts and a surgeon at Brigham and Women’s Hospital in Boston) zeroed in on the border town of McAllen, Texas, about 800 miles from El Paso.

In 2006, Medicare spent $15,000 per enrollee in McAllen, almost twice the national average and $3,000 more than the average McAllen resident earns in a year. It’s second only to Miami, and Miami has much higher labor and living costs.

Gawande’s article focused on three areas interviewees cited for McAllen’s healthcare costs: lifestyle, technology, and overutilization of services. After speaking with doctors and administrators, Gawande determined that “the primary cause of McAllen’s extreme costs was, very simply, the across-the-board overuse of medicine.”

Information from Jonathan Skinner, an economist at Dartmouth’s Institute for Health Policy and Clinical Practices, helps support that theory. Compared with patients in El Paso and nationwide, McAllen patients routinely receive more of virtually every healthcare service, whether it’s diagnostic testing, hospital treatments, visits to specialists, surgery, or home care.

“More” Doesn’t Always Equate “Better”

Though Americans often believe that “more” is “better,” research shows that’s not always true, especially in the world of medicine.

Case in point: Decades ago, the Mayo Clinic in Rochester, Minn., recognized the first step toward putting the patient’s needs first was to eliminate financial barriers. It pooled all money the doctors and hospital system received and began paying everyone a salary, so the services doctors provided or prescribed wouldn’t increase their income. No one intends to perform fewer scans or procedures; their goal is to increase quality and help the staff work as a team. But all the collaboration has led to lower costs. Today, the Mayo Clinic has some of the highest levels of technology and quality, but its Medicare spending is in the lowest 15 percent of the country.

Grand Junction, Colo., is another example of what Dartmouth’s Elliott Fisher calls “an accountable-care organization.” The leading doctors and hospital system joined forces years ago to blunt harmful financial incentives, hold regular peer-review meetings to ferret out problems, and be collectively responsible for improving patient care. The result: Problems went down, quality went up, and costs are lower than nearly anywhere else in the United States, the article stated.

Experts Weigh In on Findings

Some physicians in McAllen were said to increase their income by owning strip malls, orange groves, and apartment complexes. Others owned imaging centers, surgery centers, or another part of the hospital they directed patients to; theoretically, those ownerships could help pad physician bank accounts by making them more inclined to prescribe more tests or services for patients. That reality, however, might not paint the entire picture.

 “There are many primary care physicians who are practicing good medicine down here,” E. Linda Villarreal, MD, past president of the Hidalgo-Starr County Medical Society told Kaiser Health News. “I do believe there are physicians who perhaps are looking at other business ventures and profits first and then patient care second. But it is a very small percentage of the physician population in the valley.” 

“The real challenge as a primary care physician is convincing patients that overtreatment is not the same as state-of-the-art treatment,” added Joseph W. Stubbs, MD, president of the American College of Physicians and a practicing physician in Albany, Ga. “Patients seem to feel if you’re not necessarily recommending the newest imaging test like an MRI or a CAT scan or you’re not referring them to a specialist, that you’re just trying to save money. Instead, we’re trying to say good care can be done without those things. It can be done by some common sense things that are more low-cost.”

In fact, check out Medicine & Health, Vol. 63, No. 21 for a story on the over-use of diagnostic imaging.