Tuesday, August 4, 2015
5 things Atul Gawande learned on his return to McAllen, TX
Gawande returned to McAllen after a five year hiatus since his original visit to investigate the extreme variation in health costs at McAllen,TX vs.the rest of the United States. In May 2015 Dr Gwande published an article on health overspending in the New Yorker In this article he explains,
As a follow up to his seminal New Yorker articles, “The Cost Conundrum” and “The Cost Conundrum: Redux,” surgeon and author Atul Gawande provides an update on the very interesting town of McAllen, Texas and their health care spending problem. Six years ago Atul Gawande went on a fact finding mission to McAllen-- a community with double the average Medicare spending ($14,000 versus $7,000)-- to explore what the IOM calculated to equal a third of all health expenditures including unnecessary, redundant, and medically and scientifically ineffective tests, procedures, and treatments. He found a system in denial and with high rates of hospital admissions, evasive-expensive surgeries, and outpatient home health care.
Gawande returned to McAllen recently and was greeted by an entirely new system. Inpatient visits had fallen by 10 percent; home health care spending was down 40 percent; ambulance rides were down 40 percent; and cost per beneficiary dropped almost $3,000 resulting in nearly half a billion dollars saved. What happened in Texas was unprecedented.
More evidence shows payment and delivery reforms may be working.
The biggest opportunities for cost reductions are with complicated patients.
The development of an ACO (accountable care organization) may provide resources, financially, with leadership and coordination of care. This may be unique in McAllen since PPOs, Managed care and other group practices were not in existence during the initial study by Dr. Gwande.