The Cost of Care, Part I

The Dallas Morning News began a five part series called “The Cost of Care” on the cost of medical care in Dallas in this Sunday’s paper. The news outlet has devoted a section of their Website to this series, which you can access here. It contains polls, interactive maps and links to the online versions of the stories from the series which appeared in print. I would like to take the next few weeks to examine the articles in this series, many of which confirm the positions CHRISTUS has taken for years past.

As health care reform discussions once again overwhelm the news we hear from Capitol Hill, this series is timely and frames the debate well. The articles and vignettes from part 1 of the series, which debuted on Sunday, cover a wide variety of topics, and tell the stories of many local people who can’t afford insurance or struggle to, only to find out in times of crisis that it did not cover their treatment needs. Many of these stories can be accessed online, and I suggest you take a few moments to read them, because they remind us all that the cost of having no or too little insurance is a human one. It is imperative for all of us—health care providers, legislators and regulators—to remember that we exist to serve people, in this case people who are sick and need healing or need preventive care to keep them healthy.

The main article in Sunday’s section aims to answer why Dallas spends more for health care than almost any other big city in America. You may recall this sounds similar to Atul Gawande’s question in his article “The Cost Conundrum, What a Texas town can teach us about health care,” which I have mentioned several times on this blog. The Morning News points out that

In 1992, Dallas was well below the national average in Medicare spending – much less than Fort Worth, Houston, San Diego and 121 other hospital regions across the country. By 2006, spending in Dallas had soared. The Dartmouth Atlas on Health Care now ranks Dallas 13th in the nation, well ahead of Fort Worth and Houston.

The article offers some reasons why this may be occurring, which I have often suggested are the reasons for skyrocketing medical costs. These include
• Overuse and over-prescription of tests and technology. The Morning News says that “Area doctors are seeing patients more often, ordering more tests and doing more procedures.” As I mentioned last week, overuse of diagnostic tests on patients is rampant in the U.S. health care system, and very rarely accomplishes much more than increasing costs.
• Competition causes duplication of costly services, and does not therefore result in reduced costs. The author states that “In other businesses, competition tends to drive prices lower as companies jostle for customers. Not in health care, and not in Dallas. Competition drives up spending.” We have long been in agreement with this statement, which is why we perform a thorough needs evaluation before entering any community. One such evaluation of the Dallas community proved to us that it was over-bedded, which is one reason why the CHRISTUS system has its headquarters in the Dallas area, but is not an acute care provider in this market. We determined long ago that Dallas already had more than enough acute care providers.
• The uninsured and underinsured often delay treatment, ending up in our Emergency Departments—the most expensive place to receive care—when their malady has progressed into something much worse than if we had treated it in its early stages. As a result of this and a gap in government reimbursement, costs for treatment can be shifted to insured patients. The article quotes Gary Brock, chief operating officer of Baylor Health Care System, who said that “ ‘the government reimburses Baylor just 80 percent of its costs for Medicare patients. To make up the difference, Baylor charges privately insured patients 150 percent of its costs.’ “
• Care that is coordinated is best for the patient. The Morning News says that, “A broken market also helps explain a second cost culprit in Dallas. Patient care is not well-coordinated. Once a patient enters a hospital, family doctors say they are left out of the loop. Lots of doctors start duplicating one another's tests, ordering drugs that may interact in dangerous ways and leaving the physician who best knows the patient in the dark.” In fact, family doctors and Emergency Departments or specialists also duplicate tests, driving up the cost of care.
• The U.S. health care system rewards quantity, not quality, and provides perverse incentives for physicians and hospitals to provide more, not necessarily better, care. While we were in Washington, D.C. at the end of July, we had a chance to meet with Mark McClellan, who heads the Engelberg Center for Health Care Reform at Washington's Brookings Institution. We discussed the many proposals coming out of Capitol Hill, and he said much the same thing to us that he said to the Morning News: creating accountable care organizations that pay providers extra for quality and efficiency instead of volume will drive down the cost of care.

The stories told by the Dallas Morning News in this informative series highlight problems with the health care system that are national, not just specific to the state of Texas. Nest week we will examine the second part of the Cost of Care series.