BY IAN MORRISON

As a Scot, obviously I am a whisky fan, and although I prefer the smoky malts of Islay (where my grandfather was from and where I visit my friends there frequently), I am also a huge fan of McCallan 18-year-old whisky, the sticky toffee pudding of single malts.

But as all policy wonks know, McAllen Texas is not famous for whisky but for Atul Gawande’s “Cost Conundrum” article in the New Yorker, in 2009 which is still required reading in medical school and MPH classes and was arguably the cornerstone of Obama health policy and the ACO movement.

Dr. Atul Gawande described overutilization and high cost of Medicare revealed by Dartmouth Atlas nationally and zeroed in on McAllen Texas.  Compared to El Paso (a seemingly like comparison) McAllen was the most expensive place in America for healthcare based on Medicare claims data.  Gawande highlighted the entrepreneurial, doctor-owned, Doctor Hospital at Renaissance DHR in Edinburg, TX as having fancy, modern technology while the community as a whole seemed underserved.  

I have always had unease with just using Medicare data to judge costs, because there was no recognition of what I was observing on my travels, namely an enormous variation in commercial prices (not simply utilization) in hospital costs in terms of paid claims by self insured employers.  Poignantly, sources at the time claimed McAllen, Texas had among the lowest commercial insurance premium places in the country.  Interesting.