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Atul Gawande is too optimistic about health care cost control

Posted Dec 11 2009 1:05pm
The subtitle of Atul Gawande’s Testing, Testing article in the December 14 New Yorker is:

The health-care bill has no master plan for curbing costs. Is that a bad thing?

In Gawande’s view, the answer is: no, it’s not a bad thing at all. Because:

  • No one really knows which of the many cost control ideas out there will actually work so we can’t just pick one and enact it
  • There are lots of pilot programs in the bill, and from those we will learn what works
  • The agricultural extension agent program, which revolutionized American farming through a diffuse, government-run model, can work in health care, too

As we’ve come to expect from Gawande, the article is readable, interesting, and thought-provoking. The background on the agricultural extension agents is especially enjoyable. He points out that agriculture used to consume 40 percent of household income and that it was overly labor intensive, small-scale and inefficient. Gradually people transitioned away from the farm and food became much more affordable as the program rolled out. The government had a big role but never took over agriculture (unlike in the Soviet Union). The same can happen in health care, he says.

As a city-dweller, I first heard about the agricultural extension agent model last month from an academic physician from Minnesota. Like Gawande he pointed to the agricultural centers as big winners. “The most successful thing the government’s ever done,” he said. But he also let me know that many people in Minnesota were quite upset that the term “regional extension center” was being applied to the health IT programs that were authorized in the ARRA/HITECH stimulus bill passed earlier this year. They’re worried about whether the model will work in health care, and are also a little upset that the existing extension centers didn’t just get to add the health IT component.

I have some serious problems with Gawande’s optimistic view:

  • It’s unclear to me why pilot programs are likely to be successful in ultimately transforming the health care environment. Medicare has done a number of demonstration projects over the years. Some of these projects (like the MHS project on disease management are set up to fail and/or have the plug pulled on them). In any case, by the time the results are in and implemented we’ll be even further into the mess
  • Unlike some critics who fear the government will get too deeply into health care, my issue is we’re already there. Medicare as it stands is already so dominant that private sector actors can’t make much headway in changing the system. And yet because of the political environment in which Medicare operates, it’s not really in a position to make serious changes
  • Third-party payment isn’t the main driver for agricultural markets. Most people just go out and buy what they want –even if they use food stamps. Sure there are some pricing distortions in the background but it’s nothing compared to the distortion of the health care market caused by the disconnection between health care consumers and those who are paying. Even high deductible health plans don’t solve this problem, since the big ticket items are still paid for by insurance
  • Doctors aren’t farmers, and while I’m not so closed minded as to completely reject the analogy, please show me a radiologist or cardiologist or dermatologist with a question analogous to the farmer in Gawande’s story who wants to know how to prevent his spinach from wilting

We have serious problems with the health care system in this country and there’s no clear path out. Even the somewhat bumpy road Gawande maps out is a lot gentler than what we’re likely to face.  I understand the appeal of those who want to get government out of health care completely (or close) but that’s not a realistic option at this point.

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