Annals of Medicine: The Cost Conundrum: Reporting & Essays: The New Yorker
THE COST CONUNDRUM
What a Texas town can teach us about health care.
It is spring in McAllen, Texas. The morning sun is warm. The streets are lined with palm trees and pickup trucks. McAllen is in Hidalgo County, which has the lowest household income in the country, but it’s a border town, and a thriving foreign-trade zone has kept the unemployment rate below ten per cent. McAllen calls itself the Square Dance Capital of the World. “Lonesome Dove” was set around here.
McAllen has another distinction, too: it is one of the most expensive health-care markets in the country. Only Miami—which has much higher labor and living costs—spends more per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average. The income per capita is twelve thousand dollars. In other words, Medicare spends three thousand dollars more per person here than the average person earns.
via Annals of Medicine: The Cost Conundrum: Reporting & Essays: The New Yorker.
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Yes, the cost varation in U.S. medicine is incredible.
The “secret Key” is to align the financial incentives of the physicians (who drive over 80% of patient care & testing costs) with insurers (who process bills – they more bills they process, the more they profit) with hospitals (who have huge fixed costs, so like a hotel, an empty bed make $0 contribution to overhead costs), with manufacturers (who make increased profit with single use “disposables”).
Fully fucnctional EHR/EMR will be a powerful tool to also align cost and outcome data to shift the model to reimburse for efficient, quality healthcare.
The rapidly developing Hospitalist model of care will also be very powerful once they begin to implement P4P.
Comment by Marshall Maglothin, MHA MBA — June 17, 2009 @ 4:33 pm