🖤 Donations of all sizes power our public service journalism Give Now

Why health care costs are so high

Marketplace Staff Jun 2, 2009

Why health care costs are so high

Marketplace Staff Jun 2, 2009


Kai Ryssdal: In a speech a couple of months ago, President Obama said the biggest threat to the economy isn’t the financial crisis or the recession. It’s the rising costs of health care. Today the White House Council of Economic Advisers went the president one further. The council reported that gross domestic product would actually get a boost if health-care costs were scaled back. As much as an 8 percent bump by the year 2030.

Dr. Atul Gawande has been trying to understand why health-care costs are so high. He’s got a professional interest. He’s a surgeon. But he’s also a writer for The New Yorker magazine. And the most recent issue of that magazine found him in McAllen, Tex., in search of answers to his questions. Per capita, McAllen pays more for health care than almost any other city in the country. Almost $15,000 a year. But Dr. Gawande says it’s not because McAllen is all that much unhealthier than other places. Or that the people there get better care.

ATUL GAWANDE: Instead what we saw was just more services, more of almost everything that a doctor can order was ordered there. Whether it was more ultrasounds and scans, more heart surgery, more pacemakers, more bladder scopes and knee replacements.

Ryssdal: So it was just more for the sake of more?

GAWANDE: Well, that’s the puzzle of it. You know, I looked at a place like Mayo Clinic, which is in the lowest 15 percent of health-care costs in the country. And they do much lower volumes of all these kinds of scans and procedures, and seem to get better results out of it. And so part of what may be going on is just habit. In much of American medicine, we habitually think that more is better.

The second thing I found in McAllen was fragmentization. There’s multiple hospitals, the doctors go to different places, and there’s no system in place to make sure that preventive care is provided. There’s not overtreatment.

And then the last thing, which was the dismal, somewhat depressing thing to find, was there is some layer that I encountered there of just money-mindedness. Where the drive to make sure that the revenues are high, there can be a tendency in a heart-burn patient, to push for the idea that heart-burn patient should get a scope, should get different kinds of studies at much higher rates than they are done elsewhere in the country.

Ryssdal: What I hear is, and this is the point you eventually get to at the end of the article, that it’s the way that doctors are paid, and it’s this treatment of patients as, as you put it, profit centers that really drive so much of the cost of medicine, in McAllen and then by extension, the rest of this system in the country.

GAWANDE: Yeah, when I think about money as a physician there’s three ways you can think about it. One is you just try to ignore it, and hope that your expenses come out OK at the end of the month, and you can pay the secretary, and your malpractice premiums, and the rent on your office.

The second way doctors think is, hey, I’ve got some good money coming in maybe I’ll use it to improve the quality of care for my patients. And so they’ll hire a nurse practitioner to follow up on the diabetes patients, make sure people are all getting their mammograms like they are supposed to. And then there’s a third way you think about the money, which is that you just focus on how do you maximize the revenue.

Ryssdal: Is it reassuring then, for the prospects of health-care reform, that there seems to be a lot of room to cut fat without really affecting the quality of care?

GAWANDE: Yeah, this is why the economists get excited about seeing place like McAllen. And McAllen, by the way, is a sort of extreme form of a part of medicine that we have everywhere we go. And it’s the idea that more does not necessarily result in better. In fact, it seems to make care worse. And that possibility that we could ensure that we are exposing people to less risk from less operations, we will save significant dollars for the country.

Ryssdal: Is it possible to get this done, do you think?

GAWANDE: Yes, but not quickly. This is about the idea that we are going to change the culture of medicine to be one where we have much more collaboration, involvement of primary-care physicians, efforts to make sure that specialty care doesn’t introduce more risks than benefits. In some communities they figured that out, and we have to learn from those communities and bring it to the rest of the country. And that’s very hard to do in a middle of a huge economic downturn that’s hurting hospitals and doctors, like everybody else.

Ryssdal: Atul Gawande is a surgeon at Brigham and Women’s Hospital in Boston. He teaches at Harvard Medical School. To our point, though, he writes for The New Yorker magazine. Dr. Gawande, thanks so much for your time.

GAWANDE: Thank you.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.