Must-read article by Atul Gawande on delivering better, cheaper medical care through ‘hot spotting’ (New Yorker)

March 9, 2011 at 10:51 am Leave a comment

by Alec Patton

First of all, a remarkable fact: in Camden, New Jersey, one per cent of patients account for a third of the city’s medical costs. And Camden isn’t unusual in this respect.

Atul Gawande’s article is all about the people who are using this fact to tackle America’s rising healthcare costs and deliver better care to the people who need it the most (most of the top 1% is expensive because they’re in and out of the emergency room so much, not because they’re receiving the best care).

The entire article’s fascinating, but I wanted to provide just one among its wealth of insights, so here’s an extract about what happened when a company tried to lower the costs of its health benefits by increasing the amount that its employees had to pay for their prescriptions. Suffice to say, this strategy didn’t work out as planned:

[Nathan Gunn] told me about an analysis he had recently done for a big information-technology company on the East Coast. It provided health benefits to seven thousand employees and family members, and had forty million dollars in “spend.” The firm had already raised the employees’ insurance co-payments considerably, hoping to give employees a reason to think twice about unnecessary medical visits, tests, and procedures—make them have some “skin in the game,” as they say. Indeed, almost every category of costly medical care went down: doctor visits, emergency-room and hospital visits, drug prescriptions. Yet employee health costs continued to rise—climbing almost ten per cent each year. The company was baffled.Gunn’s team took a look at the hot spots. The outliers, it turned out, were predominantly early retirees. Most had multiple chronic conditions—in particular, coronary-artery disease, asthma, and complex mental illness. One had badly worsening heart disease and diabetes, and medical bills over two years in excess of eighty thousand dollars. The man, dealing with higher co-payments on a fixed income, had cut back to filling only half his medication prescriptions for his high cholesterol and diabetes. He made few doctor visits. He avoided the E.R.—until a heart attack necessitated emergency surgery and left him disabled with chronic heart failure.

The higher co-payments had backfired, Gunn said. While medical costs for most employees flattened out, those for early retirees jumped seventeen per cent. The sickest patients became much more expensive because they put off care and prevention until it was too late.

As Gawande writes, the overarching issue is that ‘Medicine’s primary mechanism of service is the doctor visit and the E.R. visit.’ He points out that this is great for some people, but not for the most expensive patients:
For a thirty-year-old with a fever, a twenty-minute visit to the doctor’s office may be just the thing. For a pedestrian hit by a minivan, there’s nowhere better than an emergency room. But these institutions are vastly inadequate for people with complex problems: the forty-year-old with drug and alcohol addiction; the eighty-four-year-old with advanced Alzheimer’s disease and a pneumonia; the sixty-year-old with heart failure, obesity, gout, a bad memory for his eleven medications, and half a dozen specialists recommending different tests and procedures. It’s like arriving at a major construction project with nothing but a screwdriver and a crane.
This has the potential to totally transform American health care, and the Obama administration’s health care strategy is supportive of the sorts of initiatives Gawande describes. However, these initiatives are already fighting the group that has set itself up as the chief opponent of this reform… the medical profession.
You can read the full article here

Entry filed under: Innovation Policy.

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