Border Health Response to The New Yorker Article: “The Cost Conundrum”

A recent article in The New Yorker magazine attracted national attention to the practice of medicine in McAllen, Texas. The article drew conclusions on why health care costs were higher in McAllen versus the rest of the United States based on Medicare spending data. We agree that Dr. Gawande’s article documents variations in health care services delivered across the country. However, the Border Health Caucus believes we need to more closely examine the health care delivery system to ensure that any future reforms actually reflect some of the unique demographics of each region and, in the end, serve the best interests of our patients. To do this, we must understand the data and research thoroughly to ensure its validity and accuracy.

We have several concerns with the information provided in Dr. Gawande’s article. First, health care delivery in McAllen faces many unique challenges that should be taken into account, or at least acknowledged, when used in comparisons. Among these are:

  • Its population is the poorest in the entire United States;
  • It has the fewest physicians per capita in the entire United States;
  • It has the second highest uninsured rate in a state that is the Uninsured Capital of the United States;
  • It is heavily reliant on Medicaid and Medicare payments to finance its entire health care system; and
  • It is plagued by very high rates of obesity, diabetes, lack of exercise, and overall poor health status.

For The New Yorker article, Grand Junction, Colo. and the Mayo Clinic service areas stand in stark contrast to McAllen. The poverty rate in McAllen is nearly three times what it is in Grand Junction or the Mayo Clinic.

McAllen’s physician supply is half that of Grand Junction or the Mayo Clinic. Also, more than 60,000 mostly elderly, additional “winter Texan” households spend an average of four months each year in the Rio Grande Valley, adding to the pressure on an already overworked physician labor force.

Where there is poor availability of outpatient care, patients are far more likely to seek routine care in hospital emergency rooms, where costs are high and diagnostic testing is more frequent. This is also far more likely to result in costly hospital admissions. The data that Dr. Gawande depended on – but did not report – show just this. McAllen has a pattern of unusually high inpatient costs, while outpatient costs are close to average.

Finally, McAllen has a long history of serious problems with medical liability. Despite Texas’ highly effective 2003 health care liability reforms, McAllen’s tradition of a troubled liability climate has had a substantial effect on medical practice (defensive medicine) in the area, and undoubtedly has played a role in the physician supply problems.

Medicare spending is not necessarily a good proxy for total health care spending 

  • Recent research published by Health Affairs[1] showed that regional variation in Medicare spending is not related to total health care spending.
  • Areas with more total health care spending have better quality, lower infant mortality, and lower rates of preventable deaths; while higher Medicare spending is associated with lower quality and higher rates of infant mortality and preventable deaths.
  • Quality depends on total health care spending and relates to multiple demographic characteristics.
  • Higher Medicare spending occurs where there are higher percentages of uninsured people – who may have had poor lifetime access to health care.

McAllen poses unique socioeconomic challenges for health care delivery 

  • The McAllen MSA is the poorest in the nation. Per-capita income in the McAllen MSA is $18,316, less than half the national average.
  • The poverty rate in McAllen is 34 percent, nearly triple the national average of 13 percent.
  • More than 30 percent of McAllen residents are uninsured, compared with the national average of 17 percent.
  • About 13 percent of McAllen residents have diabetes, compared with the national average of 8 percent.

McAllen has the fewest physicians per capita of any place in the country 

  • At 116 physicians per 100,000 population, the McAllen area has the lowest rate in the entire country and 43 percent fewer physicians than the U.S. average.
  • With just 45 primary care physicians per 100,000 population, the McAllen area is 37 percent less than the U.S. average.
  • Research shows[2] that having more physicians is associated with better quality.
  • The addition of more than 60,000 households of “winter Texans,” mostly elderly visitors from northern climates who spend an average of four months each year in the Rio Grande Valley, adds to the pressure on an already overworked physician labor force.
  • McAllen has a long history of serious problems with medical liability. Despite Texas’ highly effective 2003 health care liability reforms, McAllen’s tradition of a troubled liability climate has had a substantial effect on medical practice (defensive medicine) in the area, and undoubtedly has played a role in the physician supply problems.
  • When there is poor availability of routine ambulatory care, patients are far more likely to get their outpatient care in hospital emergency rooms, where costs are high and diagnostic testing is more frequent, and they are far more likely to have costly hospital admissions. The Dartmouth Atlas data used in The New Yorker article confirm this, showing a pattern of unusually high inpatient costs in McAllen, while outpatient costs are close to the national average.
  • The Dartmouth Atlas data show that almost all of the cost growth in health care comes from the use of outpatient services, imaging, and office visits. Again, when it comes to outpatient costs, McAllen is close to the national average.

Border communities are not all the same, i.e., El Paso is not McAllen 

  • The New Yorker article compared the Dartmouth Atlas Medicare costs in El Paso, Texas, another poor city on the Texas-Mexico border, with those in McAllen. El Paso’s Medicare costs are close to the U.S. average.
  • While El Paso does indeed share many of socioeconomic characteristics with McAllen, it is in many ways far better off.
  • The number of physicians per 100,000 residents in El Paso is well below the national average but still 24 percent higher than in McAllen.
  • Per-capita income in El Paso is well below the national average but still 45 percent greater than in McAllen.
  • The poverty rate in El Paso is well above the national average but still 18 percent lower than in McAllen.
  • The prevalence of diabetes in El Paso is greater than the national average but still 27 percent lower than in McAllen.

Grand Junction, Colo., and the Mayo Clinic service area are stark contrasts with McAllen 

  • The New Yorker article used the lower Dartmouth Atlas Medicare costs associated with the integrated health care system in Grand Junction, Colo., and the area surrounding the Mayo Clinic in Rochester, Minn., as examples of better controlled health care spending.
  • The socioeconomic characteristics in Grand Junction and Rochester differ starkly from those in McAllen.
  • Both Grand Junction and Rochester have twice as many physicians per 100,000 population as McAllen and both are above the national average.
  • Per-capita income in McAllen is 44 percent less than in Grand Junction and 55 percent less than in Rochester.
  • The poverty rate in McAllen is nearly three times that of Grand Junction and more than four times greater than in Rochester.
  • The uninsured rate in McAllen is nearly double what it is in Grand Junction and almost four times greater than in Rochester.

Home health care services in McAllen appear to be out of line with the rest of the country 

  • At $986 per enrollee in 2006, outpatient Medicare payments in McAllen were roughly in line with Grand Junction and the national average, and actually 24 percent lower than in Rochester.
  • At $3,533 per enrollee, Medicare payments for home health services in McAllen were seven times the national average and three-and-one-half times the average for Texas.
  • Medicare home health care payments in Rochester were one-seventh the national average; in Grand Junction, they were 40 percent less than the national average.  
 
 References 

[1] Richard A. Cooper, States With More Health Care Spending Have Better-Quality Health Care: Lessons About Medicare, Health Affairs 28, No.1(2009):w103-w115 (published online 4 December 2008; 10.1377/hethaff.28.1.w103).

[2] Richard A Cooper, States With More Physicians Have Better-Quality Health Care, Health Affairs 28, No.1(2009):w91-w102 (published online 4 December 2008;10.1377/hethaff.28.1.w91).

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