Monday, June 01, 2009

McAllen, Texas - America's failing experiment in health care cost control.

There's a collision course of sorts that's been playing out in medicine for the last 25 years. As the costs of health care have consumed more and more of GDP, the system has become unsustainable. Physician salaries bore the brunt of early cost containment with effective pay cuts of 50-60% in real income since the mid 1980's. More recently it's been the patients on the receiving end, with more employers dropping coverage and more people enrolled in high deductible/high copay plans.

An article in the New Yorker Magazine, "The Cost Conundrum - What a Texas town can teach us about health care" profiles McAllen, Texas. McAllen is the most expensive place in the country in terms of annual expenditures on medicare beneficiaries. It illustrates the law of unintended consequences and reinforces the notion that anyone who thinks health care costs will come down with universal coverage is foolish. More coverage = more utilization, particularly when patients do not bare much of the costs themselves out of pocket.

The article also features the behavioral changes of physicians as they've become more entrepreneurial. It's profiled as a negative in the article, but it really should be encouraged. In modern medicine, if you do not run your practice like a business, then your practice will fail. Physicians should be encouraged (when able) to align their entrepreneurial interests with their patients. In many instances this will run you head first into government bureaucracy and established interests as in the case of my office surgery suite. Don't even get me started on the fact that I'd be able to do some procedures in my soon to be accredited office O.R. at 40%+ discounts to Medicare and Blue Cross for what it costs to do in a hospital. You'd think this would be of interest to Medicare and the state of Alabama as it would likely save several hundred thousand dollars annually, but instead it's like talking to a brick wall.

Cosmetic Plastic Surgery practices has been the attentive to economics for a long time, and you're forced to be cost-conscious to maintain that kind of practice. The revenue from the cosmetic procedures I do affords me the opportunity to maintain a busy reconstructive practice on cancer patients.



DrDiSaia said...

I have been doing much more reconstruction lately, but the cosmetic business pays over half the bill.

Anonymous said...

I think the point of Dr. Gawande's article is that the focus in some of these "businesses" has become business - and not patient care. Decisions are being made based on revenue potential, not best practices. The practice has become business-driven, not patient-driven.

Absolutely, every physician needs to understand that her/his practice is a business and manage it appropriately, but you can't use patient care as increased revenue potential for your business. How can patients trust the recommendations of their physicians? Is it best for me or for your bottom line?

We complain about loss of trust from the public. This is part of the reason.

Dr. Rob Oliver Jr. said...


I'd disagree with the blanket statement that you "can't use patient care as increased revenue potential for your business". Of course you can, and we should be encouraged to dovetail areas where our financial interests and patient care can peacefully coexist. It's never laid out in the article exactly what was inappropriately done on a given patient. A $ sign on medicare expenses for a metro area tells you very little about any given patient.

I used the example of my office OR which can achieve signigant cost savings with faster discharges and lower infection rates then a hospital can. Patients would overwhelmingly choose this setting over a hospital campus for outpatient procedures if their insurer would pay us to use it.

Anonymous said...

I would have to question whether you see your patients as the ATM that illustrated Dr. Gawande's article, when you say that of course you can view patient care as potential revenue opportunities.

Great care must be taken when a physician recommends treatment that includes a direct financial benefit to her/himself.

I do believe that loss of trust from our patients is a casualty in this way of doing business.

Patient-centered care must be the standard - business and financial benefit cannot be a consideration in treatment plans. Of course, treatment plans result in a financial benefit for someone and no reason it cannot be the physician making the recommendation, but be prepared to defend your recommendation - without resentment and arrogance - if your motives are questioned.

Personal responsibility also includes responsibility to behave and respond in a way that may leave you with a few less dollars in your pocket.