New ideas on healthcare reform

Well, they’re not exactly new ideas. They’re new to me. More importantly, they’re ideas that didn’t seem to make the cut for either Democratic or Republican talking points. Which doesn’t mean they’re good ideas, but at least they’re thought provoking. (Hat tip: david1clark)

In June, New Yorker correspondent and practicing physician Atul Gawande profiled the town of McAllen, Texas, which has the honor of having the highest Medicare cost per patient in the nation. Healthcare costs are so high in McAllen because doctors there prescribe so many more tests and procedures (although there is no evidence this translates into additional health for their patients).

That’s interesting, because neither party seems to be saying that the problem in America is that we get too much healthcare. The President says he will save hundreds of billions by eliminating waste and fraud, not by limiting treatement.

Why are doctors so interventionist in McAllen? In one word, the answer is capitalism. Doctors in McAllen have quite an entrepreneurial streak and seem to be interested in making as much money as possible. In other words, Gawande thinks President Obama may have been onto something when he suggested that doctors remove kids’ tonsils just to make money.

Going further, Gawande argues that paying doctors by the procedure is why costs are out of control throughout the country, not just in McAllen. At the world-famous Mayo Clinic, which pays its doctors a salary, costs remain low even though the care is the best in the world.

Would it be so easy to duplicate that achievement on a national level? I don’t know. Is it possible that doctors everywhere are too interested in money? I’m skeptical. None of my friends who’ve gone to medical are in it for the money. But misaligned incentives can lead good people to make bad decisions. Color me curious.