by Luke Shulman

A Listening Tour

There has been much speculation about Amazon & JP Morgan & Berkshire Hathaway healthcare joint venture. Recently, the newly appointed CEO of the effort, Atul Gawande, announced he was embarking on a “listening tour” of the 1.2 million employees who work under that umbrella.

We thought we would compile the dream health care itinerary. Each stop, according to publicly available data, shines a light on the tremendous hurdles in the healthcare sector that any policy maker or executive needs tackle.

First Stop: Wellington, Texas

Wellington, TX is the county seat of Collingsworth county which has the distinction of having the highest per-person Medicare spending in the country. In fact 7 out of the top 10 counties for per-person Medicare spending are all in Texas. Using CMS’s standardized costs, the government spends twice as much on the 604 beneficiaries in Collingsworth county as they do on a Medicare beneficiary in New York City.

This wouldn’t be Dr. Gawande’s first visit to the expensive regions of Texas. This finding was the subject of his 2009 New Yorker piece on the Cost Conundrum where he profiled the then highest-cost Hidalgo county and the city of McAllen. His efforts paid off, for the most recent year 2006, Hidalgo county which was the subject of the profile is now out of the top 1000.

This type of utilization will cost you too. Rates for health plans Wellington are second highest (only Nome, Alaska costs more) so this is one case where living in New York might pay off.

Also a must see in the area the US 83 Bridge at Salt Fork where Bonnie & Clyde drove their car into the river and held a local farm family hostage until they could escape.

Second Stop: Steele, North Dakota

Unlike total Medicare spending, Steele is notable because it has the highest costs per hospitalized patient. When a patient is hospitalized in Steele, their spending $10,000 more than the patient in New York (who is our ironic control region in this study).

While New York may have the tallest building, Steele has the tallest statue of a sandhill crane.

Still, we are inclined to give Steele the benefit of the doubt as to their spending. There is no clear pattern amongst the top hospital spenders. Steele isn’t too remote (only 45 minutes from Bismarck) nor does it appear to have any population health differences from the rest of the state. It’s likely a reflection of the innate unpredictability of healthcare. One patient in the 427 in Steele likely pushed the county to the top of this list.

Third Stop: Miami, Florida

Many many of the issues in our health care system manifest acutely in Florida. Of major cities, Miami has the following distinctions in Medicare data:

  • Highest costs per Medicare Patient among large cities (greater than 100,000 65+)
  • Fifth highest hospital spending
  • Highest risk scores based on CMS’ risk adjustment model
  • 12th most Medicare Advantage offerings (over 1300 plan designs). Neighboring counties Palm Beach and Broward are fourth and fifth.

And headlines of problems with Florida-based health care operators keep mounting from fraud in drug treatment in the rehab capital of America to billing fraud

Yet for all these worrisome findings, Floridians seem to get pretty good health.

According to the CDC, Florida has the 14th best mortality rate for persons aged 65 to 75. And it is better than the national average in opioid prescriptions, high-risk medications and other key quality indicators of health.

Other must see attraction in Miami, The Gold Coast Railroad Museum home of FDR’s presidential railcar.

Fourth Stop: Boston, Massachusetts

Dr. Gawande has actually been living and practicing medicine in the Boston area for most of his career so this will not be a new destination. Boston is, in many ways, the capital of health care delivery profession. Massachusetts has the 2nd most primary care providers per person in the country, the most dentists, the most mental health providers and 3rd lowest number of people who lack a “usual place of care”. (sources State Health Facts)

Its also the center of significant research. The National Institutes of Health funneled over $2.7 billion into research into Massachusetts (second only to California). That research and the scientific breakthroughs ultimately have to get disseminated and paid for somehow. This means that much of the costly interventions that shake the industry start here.

Trip Highlights

Dr. Gawande has a very deserved reputation as one of the most thoughtful thinkers and writers on our health care system today. For anyone thinking of starting a new venture to “fix healthcare”, they need to grapple with the difficulties and challenges presented in these four stops along the road. These locations illustrate four unique challenges that make healthcare provision unique among American industries:

  1. Healthcare demands constant scientific exploration and research often at great cost with varying results.
  2. There are extreme outliers breaking many attempts to identify and classify trends in the system.
  3. There is a Gordian knot of a health administration (found in both payers and providers) that when exploited can rake in millions upon billions of revenues.
  4. The health outcomes are what’s important and nothing in the claims and electronic health records has yet to identify why some populations are getting vastly healthier while other remain with poor outcomes.

For attractions, visit the Ether Dome, a massive amphitheater used for the viewing of surgeries at Massachusetts General Hospital. It was in this “surgical theater” that the ether was used as the first anesthetic for surgery.

About the sources

While I have tried to cite sources as I went along, it is worth highlighting the data sources that made this possible: