Comments on: Where Health Care is Really, Really Expensive http://www.john-goodman-blog.com/where-health-care-is-really-really-expensive/ Insights on Health Care Reform | NCPA Wed, 10 Mar 2010 23:08:11 -0600 http://wordpress.org/?v=2.8.4 hourly 1 By: 2009/8/3 | John Goodman | NCPA http://www.john-goodman-blog.com/where-health-care-is-really-really-expensive/comment-page-1/#comment-44356 2009/8/3 | John Goodman | NCPA Mon, 03 Aug 2009 13:20:08 +0000 http://www.john-goodman-blog.com/?p=3676#comment-44356 [...] –  Alonzo Cantu, founder, investor and board member of a hospital in McAllen, Texas [...] [...] –  Alonzo Cantu, founder, investor and board member of a hospital in McAllen, Texas [...]

]]> By: John R. Graham http://www.john-goodman-blog.com/where-health-care-is-really-really-expensive/comment-page-1/#comment-42986 John R. Graham Wed, 03 Jun 2009 16:51:10 +0000 http://www.john-goodman-blog.com/?p=3676#comment-42986 As always, Dr. Gawande has written a thoughtful article. I have deep respect for the decades of research by the Dartmouth crew (Drs. Wennberg, Fisher, et al.). Nevertheless, as Greg Scandlen has pointed out elsewhere, they tend to focus on the supply-side variables rather than the demand-side ones. Mr. Scandlen has pointed out that one of the small-area variations in hysterectomies noted in the early research in New England in the 1970s could be somewhat explained by the fact that one town was French Canadian (Roman Catholic) and its neighbor was Yankee (Protestant), so the women in the former town could have preferred hysterectomies to birth-control measures. Also, Dr. Gawande relies only on Medicare payments to conclude that McAllen is extraordinarilly expensive, whereas more recent research concludes that when private payers are factored in, spending results are quite different [R.A. Cooper, "States With More Health Spending Have Better Quality Care: Lessons about Medicare," Health Affairs 28,1(2009),w103-w115,WebExclusive published online 12/4/08]. Unfortunately, Dr. Gawande concludes that patients controlling payments will not address the problem unless someone is responsible for the "totality" of care, reflecting the views of one of his colleagues that "sheep" (patients) cannot negotiate with "wolves" (doctors). The experience of medical tourism shows that this is incorrect. Indeed if it were, the government would banish all voluntary transactions where the supplier has superior information to the consumer: that is, ALL transactions - full stop. As always, Dr. Gawande has written a thoughtful article. I have deep respect for the decades of research by the Dartmouth crew (Drs. Wennberg, Fisher, et al.). Nevertheless, as Greg Scandlen has pointed out elsewhere, they tend to focus on the supply-side variables rather than the demand-side ones. Mr. Scandlen has pointed out that one of the small-area variations in hysterectomies noted in the early research in New England in the 1970s could be somewhat explained by the fact that one town was French Canadian (Roman Catholic) and its neighbor was Yankee (Protestant), so the women in the former town could have preferred hysterectomies to birth-control measures.

Also, Dr. Gawande relies only on Medicare payments to conclude that McAllen is extraordinarilly expensive, whereas more recent research concludes that when private payers are factored in, spending results are quite different [R.A. Cooper, "States With More Health Spending Have Better Quality Care: Lessons about Medicare," Health Affairs 28,1(2009),w103-w115,WebExclusive published online 12/4/08].

Unfortunately, Dr. Gawande concludes that patients controlling payments will not address the problem unless someone is responsible for the “totality” of care, reflecting the views of one of his colleagues that “sheep” (patients) cannot negotiate with “wolves” (doctors). The experience of medical tourism shows that this is incorrect. Indeed if it were, the government would banish all voluntary transactions where the supplier has superior information to the consumer: that is, ALL transactions – full stop.

]]> By: Greg Scandlen http://www.john-goodman-blog.com/where-health-care-is-really-really-expensive/comment-page-1/#comment-42985 Greg Scandlen Wed, 03 Jun 2009 15:47:26 +0000 http://www.john-goodman-blog.com/?p=3676#comment-42985 John, A friend who knows the Texas market very well writes -- I have just started looking at this and it seems pretty clear that Gawande drew the wrong conclusions. The MOST notable difference between McAllen and ANYWHERE else, according to the published Dartmouth data at the link below, is that McAllen has FAR FEWER physicians. The result of this is that there is very little ambulatory care, far more inpatient days and a larger proportion of the care is delivered in the emergency room. It's the SHORTAGE of physicians in McAllen that is causing cost to be so high. I don't know how Gawande missed it. http://cecsweb.dartmouth.edu/atlas08/datatools/datatb_s1.php John,

A friend who knows the Texas market very well writes –

I have just started looking at this and it seems pretty clear that Gawande drew the wrong conclusions. The MOST notable difference between McAllen and ANYWHERE else, according to the published Dartmouth data at the link below, is that McAllen has FAR FEWER physicians. The result of this is that there is very little ambulatory care, far more inpatient days and a larger proportion of the care is delivered in the emergency room. It’s the SHORTAGE
of physicians in McAllen that is causing cost to be so high. I don’t know how Gawande missed it.

http://cecsweb.dartmouth.edu/atlas08/datatools/datatb_s1.php

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