By KIP SULLIVAN, JD
This is the last of a series of imaginary lectures for President Obama. I am hoping to educate him by criticizing three people who influenced him – Peter Orszag, Atul Gawande, and Elliott Fisher and his colleagues at Dartmouth. In this last installment I focus on Gawande.
Obama was deeply impressed by Gawande’s “The Cost Conundrum,” an article published in the New Yorker in June 2009. By June 2009 Obama had already adopted the managed care diagnosis (overuse) and the latest iteration of the managed care solution (ACOs, “medical homes,” and pay-for-performance, all of which will allegedly be facilitated by electronic medical records). “The Cost Conundrum” did not convert Obama to managed care ideology, but it did strengthen his belief in it.
“The Cost Conundrum” illustrates the good and the bad effects the Dartmouth Atlas has had on American health policy and on intelligent people like Gawande and Obama. The article is about Gawande’s trip to McAllen, Texas to see why per capita Medicare spending in that small town was the highest in the country. [1] Gawande knew it was high because the Dartmouth Atlas said so. Asking why Medicare spending in McAllen was so high was a legitimate question to ask.
But Gawande went way beyond exposing problems with Medicare spending in McAllen. He told his readers that the problems he uncovered in McAllen – overuse of some Medicare services induced by fee-for-service payment – afflicted vast swaths of the medical profession and that “accountable care organizations” were the answer. He specifically singled out the Mayo Clinic in Rochester, Minnesota and an informal cartel in Grand Junction, Colorado as examples of ACOs that had allegedly already proven they could provide high-quality care at very low cost. [2]
But within a few years, research would turn Gawande’s characterization of Mayo and Grand Junction upside down. It would turn out that both the Mayo Clinic and Grand Junction are costly places to be treated when all medical spending, not just Medicare spending, is taken into account. Oops.
But before I elaborate on that mistake, I want to give Gawande credit for the good “Conundrum” did do.
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