The causes of increased healthcare spending in the US  MAY 28 2009

Atul Gawande discovered that McAllen, Texas spends more per person on healthcare than El Paso (which is demographically similar to McAllen) and set out to find out why. Along the way, he encounters a curious relationship between the amount spent on healthcare and the quality of that care: higher spending does not correlate with better care.

When you look across the spectrum from Grand Junction to McAllen -- and the almost threefold difference in the costs of care -- you come to realize that we are witnessing a battle for the soul of American medicine. Somewhere in the United States at this moment, a patient with chest pain, or a tumor, or a cough is seeing a doctor. And 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.

There is no insurance system that will make the two aims match perfectly. But having a system that does so much to misalign them has proved disastrous. As economists have often pointed out, we pay doctors for quantity, not quality. As they point out less often, we also pay them as individuals, rather than as members of a team working together for their patients. Both practices have made for serious problems.

Obama, you're reading this guy's stuff, yes? Get him on the team.

Update: Dr. Peter Orszag is the Director of the Office of Management and Budget for the White House and is working on some of the problems that Gawande talks about in this article. Here's a 40-minute video of Orszag speaking on "Health Care - Capturing the Opportunity in the Nation's Core Fiscal Challenge". (thx, todd)

I changed the bit in the first paragraph about El Paso and McAllen being "nearby". Funny, I thought 800 miles in Texas *was* nearby. (thx, stephen)

I also changed "lower spending correlates with better care" to "higher spending does not correlate with better care"...those two statements are not the same. I misread the results of one of the studies that Gawande mentions. (thx, patrick)

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