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McAllen, TX As Outlier? Why Not Houston?

by GoozNews ~ 19 Feb 2010 03:50pm

Or Lubbock? Or Oklahoma City? Or New Orleans? Or any of a dozen major and minor metro areas throughout the South? According to the Medicare Payments Advisory Commission, all of them have significantly higher usage rates and costs per Medicare enrollee than McAllen, which was high-cost locale ground zero for Atul Gawande's famous New Yorker article, "The Cost Conundrum," which has become, to use the New York Times' formulation, "must reading in the White House."

Gawande grounded his analysis on per-patient Medicare claims data compiled annually by researchers at Dartmouth Medical School. "The explosive trend in medical costs seems to have occurred here in an especially intense form," Gawande wrote after the Dartmouth Atlas of Health showed McAllen as the highest spending region in the country outside Miami, where Medicare fraud is an especially virulent problem. Not so, MedPAC said. Adjust for prices and McAllen's outlier status compared to the rest of Texas and large parts of the South all but disappears.

Don't believe me? Check out the appendix to the report. Medicare service utilization rates compared to the national average: McAllen - 118%; Houston - 122%; Dallas - 117%. Other areas: Oklahoma City - 120%; New Orleans - 125%; Pascagoula, Gulfport or Biloxi, Miss. - 124%.

In other words, Texas and large parts of the South have a problem -- not just McAllen. I'll return to that in a moment.

Why am I writing about this issue today, since I wrote about it last December when the MedPAC report came out? Gawande will be the featured speaker at the National Governors Association meeting that convenes in Washington tomorrow morning. It appears that the Harvard surgeon has not only become must reading in the White House, but is also something of a rock star on the public policy circuit. If he stays on script, he'll tell the governors that 30 percent of health care costs could be wrung out of the system if all the McAllens were magically transformed to be more like Iowa and Minnesota, where health care costs average 80 to 85 percent of the national average.

Unfortunately, Gawande still hasn't publicly recognized the flaws in his presentation, at least according to his reaction yesterday on the New Yorker website, where he responded to a brief New York Times report this week questioning the Darmouth analysis. (Ironically, his spokeswoman passed along a "refused to comment" to Times reporter Gardiner Harris. GoozNews asks with Yiddishkeit inflection: "Reporters have spokeswomen?")

The Times story was based on a commentary in the New England Journal of Medicine by Peter Bach of Sloan Kettering Memorial Cancer Center (a frequent source for my own writing, I should reveal), who argued adjusting the data for illness severity and outcomes -- a measure of quality and efficiency -- eliminates most of the differentials, at least at the hospital-provider network level.

A rejoinder by Dartmouth's Jonathan Skinner, Douglas Staiger and Elliot Fisher rejected that conclusion. They said the cost differentials remain quite large even after quality and illness adjustments. But they do include an admission that regional variation is less significant than some interpreters (i.e. Gawande) claim:

The implication of these results is that excessive health care costs arise at the level of the hospital-provider network. Thus, incentives that are designed to reduce costs should be targeted to specific networks, rather than regions or states.

Now let's return to what Gawande wrote yesterday in response to the Times, and presumably after reading the dueling commentaries:

The patterns of Medicare spending I found showed that McAllen's medical community and culture simply did more-more surgery, more imaging, more specialist visits, more home-nursing visits-without clear benefit. . .There remains fierce disagreement about how much of the marked differences in spending between communities is the result of health differences between populations and how much is the result of differences in the care their clinicians provide to them. But it remains clear that there are substantial variations in the cost of care for people of similar health depending on which institutions they go to. . . Even if health reform disappears, these fundamental problems will not. The cost conundrum persists.

Note how he switches horses midstream. He starts by defending his work on regions, and concludes by claiming the problem is individual institutions.

Now back to the South. The most recent Medicare cost data revealed an interesting national phenomenon during this recession. Medicare costs soared while private health expenditures stagnated. As I wrote at the time, the most logical explanation for this trend is that local medical institutions made up for charity care given the newly unemployed and uninsured by soaking their best-paying customers: those on public programs like Medicare and Medicaid.

We're seeing the same thing happen in the individual insurance market, where soaring rates are making headlines. In economically hard-hit California, Detroit and other troubled labor markets, the insurance companies are blaming rising rates on the declining number of workers buying policies. There's less healthy people paying for the care of those who get sick.

But this is a phenomenon that doesn't necessarily depend on recessionary levels of unemployment. The South, where there's no legacy of unionization, decent wages or decent benefits, has the lowest rates of insurance coverage in the nation, with Texas the worst state in that regard. Less than three-quarters of its population has health insurance.

The Dartmouth Atlas of Health looks only at Medicare claims. Isn't it possible that the huge outlier status for most Texas cities is, in effect, a major cost shifting from the uninsured, who still show up on institutions' doorsteps for care, to Medicare and Medicaid, which at least pay their bills?

But wait, you say. Even utilization rates are substantially higher in Texas. Agreed. But here's where I leave data and logic behind and resort to anecdote. In my mother's last years (in Maryland), she was incapacitated in a nursing home where the doctor would show up about once a week to make his rounds. He would stop in every room for a few minutes, check the chart and move along. He could usually cover a dozen rooms in about an hour. Since most of the patients were in the final stages of severe dementia, there wasn't much to discuss. Sometimes there was a family member in the room. Those visits took longer.

My point is that utilization can be an imprecise metric. Hospitals and physician offices do what they do and bill whom they can. Overutilization is endemic throughout the health care system, regardless of region. Some institutions -- those that are primarily fee-for-service medicine -- are more prone to overutilization compared to those that operate with salaried physicians and have incentives to hold down costs. The Dartmouth Atlas of Health's insights into that phenomenon are spot-on and enduring. But the differences it highlights can be found anywhere.

No doubt some regions have more institutions and physician practices that engage in inefficient and poor quality care. But when it comes to gross outliers -- whether Miami, McAllen, Houston or New Orleans -- I suspect the differences have more to do with exogenous factors like fraud or the uninsured than a local culture of medicine that encourages overuse. That, my reporting tells me, exists everywhere.

Comments

There are several

Mon, 02/22/2010 - 17:29 — Jon Skinner

There are several misconceptions in this posting.  The first misconception: McAllen isn't a cost outlier.  It is.  As we have demonstrated in a recent Health Affairs article (by Daniel Gottlieb et al, posted 28 January 2010), price adjustment does nothing to move McAllen from its spot as second-most expensive region in the country, trailing only Miami.  The MedPAC report was lead astray by their "illness adjustment." Because McAllen doctors did lots of testing and treatment, lots of people were tagged as "sick." So McAllen doctors doing more "explained" away their far higher utilization.

The second misconception is when Goozner states "But they [meaning me and my coauthors] do include an admission that regional variation is less significant than some interpreters (i.e. Gawande) claim:"

I've read this over and over again and I can't for the life of me understand how he arrived at this conclusion!  We're saying that the institution should be held responsible for what they do.  And by the way, if you think that there are huge variations across regions, wait until you see how much LARGER is variations across hospitals!

My primary motive here is to clear up false statements.  I won't even begin to take on the rest of the posting. But Merrill Goozner owes an apology to Atul Gawande!

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If Atul Gawande's spokeswoman

Tue, 02/23/2010 - 13:35 — mgoozner

If Atul Gawande's spokeswoman contacts me seeking an apology, I will deal with his complaints at that time. However, as to Dr. Skinner's complaints:

1. My statement didn't say McAllen wasn't an outlier. It said it was no more an outlier (and in some cases less) than many other areas of the South, according to the MedPAC report. Skinner claims it reached its outlier status through shenanigans by local physicians as opposed to, say, Gulfport/Biloxi, Mississippi, or Houston, which must have had some other factors driving costs higher. The core of my argument questions the idea that there is something uniquely wrong within McAllen medical culture, as opposed to the more realistic appraisal that there is something wrong with parts of medical culture everywhere. Which leads me to his objection number two.

2. Support for my statement comes from Skinner et al's own words, which are reprinted right after the comment he objects to. As I then stated, there are efficient providers everywhere, even in McAllen. There are inefficient providers everywhere. Some areas have more inefficient ones than others, and thus rank near the bottom of the Dartmouth Atlas of Health rankings. Creating incentives that penalize regions, which scholars associated with Dartmouth proposed at one point, does not differentiate between the two types of providers within a region, as even Skinner et al now recognize.

One only has to do a brief review of the media explosion that greeted the Gawande New Yorker article to recognize that the main takeaway message was regional variation. Indeed, the very phrase "regional variation" has entered the common parlance of health care reform.

Now, however, we're all waking up to realize that it is really about provider networks, institutional cultures, and the like. Framing the issue in terms of regions distracts us from keeping our collective eye on the need to improve the efficiency of medical practice one network at a time, wherever they may be.

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McAllen is an outlier, and

Wed, 02/24/2010 - 14:10 — Jon Skinner

McAllen is an outlier, and regional variations exist

1. I am perfectly happy to agree with Merrill Goozner that there is lots wrong with the medical culture, but I think he's totally wrong to try to knock McAllen off it's outlier status. Even after price adjustment, per capita spending in McAllen ($13,880) is still WAY above spending in Houston ($9762) and New Orleans ($8485).  True, there are some Texas regions close on the tail of McAllen (Harlingen, adjacent to McAllen, is 4th in spending, at $11,324).   The broader message is that I just don't believe the "illness adjustment" that MedPAC uses and that scales back McAllen's outlier status.  (In general, MedPAC is the most knowledgable and sensible institution anywhere when it comes to Medicare policy --- and I support giving it more power  -- but I do take exception to this  report.)

2. He asserts that there are efficient hospitals in McAllen.  Wrong.  Let's look at the numbers; these can be downloaded right off the Dartmouth Atlas in their 2008 Atlas report (www.dartmouthatlas.org).  Medicare reports hospital quality on a scale of 1 to 100, and the national average composite quality measure is 87.2.  For the 5 McAllen hospitals reporting, the numbers are 69.5, 69.9, 72.4, 68.2, and 69.6.  In other words, they are ALL well under the national average.  But what about costs?  The national average for spending in the last 2 years is $52 thousand.  The corresponding spending for the five McAllen hospitals (in thousands): $80, $79, $79, and $66.   So, every provider in McAllen demonstrates worse quality and higher costs than the US average.

I don't know about what other Dartmouth people (Dr. Suess? Daniel Webster?) have said about regional reimbursements, but our NEJM article could not have more clearly rejected the idea of basing payments on regional performance -- the only way to get hospitals to improve is to reward them based on their own performance, not on the hospital across town. This is in no way inconsistent with the importance of regional factors -- "medical culture" for example, which could still be targeted as a way of fixing US health care, hospital by hospital.  

 

 

 

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I've always been curious

Wed, 03/03/2010 - 18:56 — LNerbonne

I've always been curious about the over-utilization issue as it relates to the quality of care being provided.  I asked Eliot Fisher about it recently at The Families USA conference in DC and his response was that they don't factor in quality.  I practically begged him to go back to his data-miners and try to tease this information out because if my mother's case is a representation of many Medicare patients, then the impact of the quality of care is a significant driver of cost and over-utilization.

Here's the scenario:  My mother, age 73 was healthy and active when she went in for removal of a stage IB (very early stage) tumor removal.  Removal was to be her cure, and she was told to expect a 5 day hospital stay. But a post- op MRSA infection led to pneumonia, sepsis, ARDS, a bad bedsore, 2 broken ribs (she was dropped), at least 20 more infections of an assorted variety, and a lengthy and costly 8 month hospitalization and rehab. But she made it home.  After being readmitted for a Community Acquired Pneumonia, shed died 10 days later of a massive brain hemorrhage (she was over-anticoagulated and not rescued in time).

So in essence, one MRSA infection led to all this. This 'care' cost over 1 million dollars; (she had great private insurance and medicare.)  If one hospital acquired infection can lead to this kind of 'over utilization' and costs, then just think of the implications based on current estimates of 2 million infections/year.  According to Healthgrades; sepsis, respiratory failure and failure- to- rescue are still the major drivers of patient safety incidents and untimely death in the Medicare population.  

The quality of care; especially in the Medicare population needs careful analysis by the people at Dartmouth and other respected institutions.  The elderly should be treated with standards  akin to those we use with infants and children; with careful attention and 'kid gloves'.  Too often, they are treated like disposable meal tickets just filling another hospital bed.

 

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