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An Interview With Atul Gawande

gawande.jpgAtul Gawande's New Yorker article comparing the medical systems of El Paso and McAllen, Tex., has been a definitional piece in the health reform conversation. President Obama has repeatedly invoked it. Senators have talked about it. The media have embraced it. I spoke to Gawande this afternoon about the fallout from his article, the problem of revenue-driven medicine, and whether a public plan would make a difference. He called from Jordan, where he's helping the World Health Organization implement better surgical protocols to reduce post-operation deaths. That made me feel very lazy in comparison. A lightly edited transcript of our discussion follows.

You've gotten some pushback on your article about McAllen, Texas. Today, in fact, some doctors from the area held a press conference rebutting your claims, and you published a blog post re-rebutting theirs. What have you found to be the most convincing counterarguments against your piece?

The three lines of criticism were ones I anticipated or even talked about. The idea that these people in McAllen are unhealthier. The idea that it's all malpractice. The one point I didn't get into was the snowbirds [retirees from colder areas who winter in Texas], but they're not in the spending calculations anyway because Medicare counts them in their home area.

The criticisms I'd been hearing and seeing but that hadn't been going away was pointing out that McAllen is the poorest county in the country. They'd say you couldn't compare it to Mayo. But I didn't. El Paso, which I did compare it to, was the sixth poorest in the United States. They're very closely similar in poverty, in immigration, in physician supply, in rates of disease, and so forth.

That brings up another point. Putting aside the difference between El Paso and McAllen, both are going to have higher costs because their people are poorer. This gets to the whole question of social determinants of health: the fact that you're sicker if you have less income, or education. Do we give that enough attention?

I think the really interesting thing is that even beyond the baseline amount of poorer health associated with lower incomes, there's this whole body of powerful literature showing that levels of inequality are even more highly correlated with poor health. So a place like Texas has poverty, yes, but also huge inequity of income. States with similar poverty but less inequity of income have much better health profiles. I've actually had this on my list to write about. I don't completely understand what it is about inequality that drives that. For instance, there's something protective about rural areas, where there's less inequality, so if you take rural areas and urban areas with similar levels of poverty, the rural areas will be healthier. And people say these areas are more socially cohesive and that's what does it. But how does that make cancer rates lower?

One thing that really struck me about your piece was that you focused much more on the question of care providers than insurance providers. The political conversation tends to do the opposite. Want to talk a bit about that distinction?

I had a hard time connecting the dots. My vantage point on the world is the operating room where I see my patients. And trying to think about whether a public option would change anything didn't connect. I order more than $50,000 worth of health care in a day. Would a public or private option change that?

People say that the most expensive piece of medical equipment is the doctor's pen. It's not that we make all the money. It's that we order all the money. We're hoping that Medicare versus Aetna will be more effective at making me do my operations differently? I don't get that. Neither one has been very effective thus far.

Do you think much that we're hearing in the political conversation is responsive to the issues you pointed out?

Part of the difficulty is that it's very hard. But you can learn from good hospitals. They do peer review, for instance, and that changes what doctors do in their offices. They blunt the financial incentives in various ways that we haven't studied at all. It's kind of ridiculous that there haven't been very many people putting feet on the ground and studying what the positive deviants are doing. There are hundreds of examples out there. They're not just the Mayo Clinic and not just Grand Junction. Go to Portland, Oregon; Temple, Texas; Pensacola, Florida. These are places that are doing something differently.

But getting there requires a change in local medical cultures and rebuilding local medical systems. All medicine is local just as all politics is local. But let's create a cadre of researchers who go into these communities and figure out what's going on and spread the word.

The Washington debate -- there are smart reasons to think about including a public option in the mix, but we have not been thinking hard enough about how we control costs and make a better system. I think it's achievable in about 10 to15 years, and maybe even faster. I can tell you three things that will transform McAllen overnight. But CBO doesn't score them.

So what are the three?

First, they spend more than $3,500 per Medicare beneficiary on home visits. El Paso is around $800. McAllen is spending more than half what many communities spend on their entire health care expenditures. The doctors there have to disinvest from these home health agencies and come to agreement on when those visits are worth using.

At the end of life, McAllen spends $22 per person on hospice but more than $3,000 on ambulance rides. In a place like Portland it will be more than $400 on hospice and around $500 on ambulances. Increasing use of hospice, offering that as an option and working as a community on how to manage end of life, would be a smart move.

Work on basic cardiac prevention like getting people statin drugs. Most studies have shown you'll lower the cardiovascular disease rate by 25 percent and lower the number of procedures ordered. This was done in by Kaiser of Northern California, and they became the first community I've ever heard of where heart disease stopped being the leading cause of death.

If you took those three things and worked on them for a year, you could go from $15,000 per person per year to less than $10,000.

You brought up medical cultures. And those are hard to change. It's hard to legislate norms. But how do they develop it? How does one city end up with a culture with totally different incentives than another?

It's not just about incentives. The interesting thing to me is not that McAllen is different from elsewhere. it's that El Paso is different than McAllen. They have the incentives to go in that direction! My hypothesis is that communities have local anchor institutions that foster values and norms that make the medical system successful. My sense is that in McAllen it was about a few institutions striking out in different ways that set the norm for what others did.

in the early 90s, McAllen was the same cost as El Paso. Three years later, they jumped into the top 10 or 20 and never really left. The first thing to really leap in price was home health care and it happened, it seems, because a few home health agencies came on the scene and began offering doctors something serious for their involvement: extra salaries as medical directors who don't really do much. McAllen is also on the leading edge of for-profit innovations. They were early with a specialty hearts center, for instance, and cardiovascular operation rates began climbing. Then you had physician-owned imaging centers and physician-owned surgery centers and everything began going up a lot.

What I've observed -- and we really need some real data behind in it -- but in those places with organized systems of care, with lower cost and higher quality, they've had to find some way to blunt the incentives of quantity over quality, or, more bluntly, revenues over patients' needs. Some of them have done it by moving doctors to salaries, like Mayo or Kaiser. But others, like Grand Junction, don't salary. They have fee-for-service. But they have medical groups that make sure that people who see more Medicaid or uninsured patients aren't penalized, and they remove a physician's privilege to practice at the hospital if they don't participate in a strong peer review system. And there are, to be sure, salary hospitals where you see very poor quality of care and people leave at three. But if you are in a fee for service system you have to have a structure around it that helps physicians resist the incentives of revenue-driven medicine.

One thing you sound like you're saying but that isn't often said clearly is that profits matter. Incentives matter. Doctors are not entirely altruistic and solely concerned with patient care. And even if the influence of these incentives is only subtle...

It may not be conscious, but it's not subtle! It's things like whether you decide to take phone calls from patients and instead bring them to your office because you're paid for office visits but not phone calls. When you have a referral whether you worry about losing the referral business if you don't do what the referrer expected you to do. Most of us really do work hard to avoid that conflict. The vast majority of doctors really do try to take the money out of their minds. But to provide the best possible care requires using resources in a way that keeps you viable but improves the quality of care.

An example is electronic medical records system. They've been proven to reduce errors and enhance communication and improve care, but they don't pay. You lose revenue getting that system into place. In another system of incentives, your incentive is to figure out how to get that system going with your colleagues and make that possible. I think I said somewhere towards the end of the piece that to reduce waste and improve quality means organizing ourselves in ways that would sacrifice revenues. And that makes it hard.

You were around in 1994 working for Rep. Jim Cooper, and then in the White House. Do you see any important similarities between now and then? Any important differences?

The big question is what has really changed since 1992 that means anything for reform? Two things that matter on the political side and then a couple on the medical side. The big things on the political side is that we've stretched the economy and our budget much thinner with the damage from health care costs. The sense that both people in business and citizens have is that we're really in danger here. That's not something people felt as palpably in 1993. I think that sense of danger has concentrated attention.

On the medical side, there is a much greater sense of dissatisfaction in our work lives. We're working incredibly hard to make the system work for our patients. But it doesn't work very well for them or us. Some of that is the march of science. The increase in coordination and complexity makes it impossible to do this stuff out of your office. We're not in a system that's well equipped to make this a satisfying way to spend your time.

But at the same time, we are in this moment when we're reinventing medicine. Because of my experience with the World Health Organization, I'm in a lot of countries. And they're experiencing much the same thing. The underlying force here is not the politics but the science. We have 13,000 diagnoses for people. 13,000 ways the human body can fail. We can treat a lot of it. But it's not like penicillin. It's complex stuff. Pathology labs and dozens of medications and treatments. Our health system was built for a 20th century science. I can keep giving you numbers if you want.

I love numbers.

Okay. There are also more than 6,000 drugs and 4,000 types of operations and procedures. That's what a hospital has to be able to manage and a doctor's office has to manage. Our system in my hometown struggles with how to manage that. We're trying to reform a system to be prepared for the 21st century of medicine and we'll be struggling for answers for awhile.

That sounds like more than a single human can handle. Does that mean we're going towards more electronic medicine. Will it be your doctor feeding your symptoms into Google?

I think the extreme complexity of medicine has become more than an individual clinician can handle. But not more than teams of clinicians can handle. And part of what's such a marvel about a place like a Mayo or places like it is that they've been able to get teams of doctors work with nurses and nutritionists to work together. I'm sitting here in Jordan showing nurses and surgeons and anesthesiologists from Yemen and Pakistan how to take a 90-second check before an operation to make sure they have the antibiotics and the blood and they've all agreed on what the operation is. We don't know how to do that culturally in surgery. We're doing dress rehearsals on how to talk to each other. It's hilarious. But when we do it, we not only lower costs, we lower the death rate 40 percent and the complication rate 30 percent. And that's why I think the answers will be there.

Photo credit: Harvard School of Public Health.

By Ezra Klein  |  June 23, 2009; 6:48 PM ET
Categories:  Health Reform , Interviews  
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Next: Should Democrats Fight for the Public Plan?


Great interview. I'm sending Dr. Gawande's key three things to most of my co-workers.

Posted by: Mike_Russo | June 23, 2009 7:13 PM | Report abuse

Dr. Gawande continues to have great insight on the issues of the day. Key here is not only the three things, but the fact that the CBO does not score them. In other words, CBO does not assume any change in the mix of utilization. I think that is a major flaw in their methodology and makes their numbers conservative. I think that we look back ten years from now and we will find reform did not cost what the CBO said it will have cost less.

Posted by: scott1959 | June 23, 2009 7:59 PM | Report abuse

For someone who travels a lot, he doesn't comment much on how European models are able to control costs and have as good or better outcomes. It's as if he is only looking to pockets of success in the US to build on. Curious.

Posted by: jeirvine | June 23, 2009 8:19 PM | Report abuse

JEIrvine ought to read Dr. Gawande's seminal piece in a New Yorker issue of January or February 2009 (Sorry, date of issue not available to me right now). Dr. Gawande deals in extenso with several European models as well as the Taiwanese one.

Posted by: jcpagaron | June 23, 2009 9:12 PM | Report abuse


There are literally mountains of academic papers, hundreds of good books and excessive documented deliberations on US Health Care reform.

However, the Guwande article in THE NEW YORKER and follow up interviews like this will have the most potent impact on long onverdue US health care reform.

Why? Excellent writing and impeccable timing.

Posted by: DrRickLippin | June 23, 2009 9:13 PM | Report abuse

I wonder whether this statement from Atul will end up getting ignored:

"We're hoping that Medicare versus Aetna will be more effective at making me do my operations differently? I don't get that. Neither one has been very effective thus far."

Medicare and Aetna don't control costs for very similar reasons: both have been afraid of, and unable to surmount, pressure from providers when they seek to control medical costs in any serious way.

The protection of provider revenue and net income becomes framed as protection of the patient from attempts to deny care or deny choice, or as preventing the poor physician from earning a living. This pushback from providers gets taken by the public at face value. Never mind that according to Forbes, 9 out of the top 10 jobs in America are physician specialties and that physicians overall earn more than $200,000 a year on average (over $170,000 in primary care and over $250,000 in specialties).

The smartest thing reformers could do right now is to set the stage in terms of incentives and organizational structures for the "market" to control costs down the road. A frontal assault on provider revenue will not get very far. Creating accountable organizations, rewarding outcomes, removing or transforming fee for service, etc., should be foremost on the agenda for controlling costs.

If we achieve that, we will bend the cost trend in the least painful, least intrusive and most reliable manner. A public payer's importance pales in comparison to changing the incentives.

Another thought: if government gets serious about controlling costs with the health plans it runs (Medicare, Medicaid and the new public payer) with a combination of fee cuts, restrictions on allowable procedures and utilization management techniques ("bean counters" telling doctors what to do) long will it be before doctors vilify the government plans just as they have successfully vilified private plans in the public eye? Republicans will take those complaints to the bank, literally and figuratively.

I don't mean to put this all on doctors, but Gawande is absolutely right that they (and other providers of care) are the key. I hope this interview becomes just as much required reading at the White House as his New Yorker article.

Posted by: jdhalv | June 23, 2009 10:22 PM | Report abuse

As Dr Gawande says, he knows about medicine, but not about insurance. I still maintain that although he is right, the big problems are in the practice of medicine, he doesn't know how to get physicians to change. He is very good at pointing out the problems, but not so hot at giving solutions. Look what happened in McAllen. They fought back. They didn't change. They fought back.

Meanwhile there is $500 Billion each year wasted in the high overhead and compliance costs of private insurance and high drug prices. We know how to claw back that money. Give Medicare to everybody (HR676) and outlaw "marketing" of prescription drugs including Drug Reps and payments to physicians.

Then once we have everyone covered and not dying from lack of insurance, we can start to look for the $1.2 TRILLION of savings we would have if we were as efficient as France or any other wealthy country.

Posted by: lensch | June 23, 2009 11:15 PM | Report abuse

“Two simple observations are key to explaining both the high level of spending on medical care and the dissatisfaction with that spending. The first is that most payments to physicians or hospitals or other caregivers for medical care are made not by the patient but by a third party—an insurance company or employer or governmental body. The second is that nobody spends somebody else’s money as wisely or as frugally as he spends his own.”

Consumers spending their own money holds costs down in every other sector of the economy: Consumers obsess about prices; providers fight to earn their business. Trying to duplicate this process through a government board of experts is pointless.

-Milton Friedman, John Stossel

Posted by: staticvars | June 23, 2009 11:22 PM | Report abuse

staticvars - You wanna apply that principal to fire departments? If we had private firedepartments we paid directly, we could save a bundle.

BTW they tried that in colonial Philly...briefly.

Posted by: lensch | June 23, 2009 11:31 PM | Report abuse

"JEIrvine ought to read Dr. Gawande's seminal piece in a New Yorker issue of January or February 2009... Dr. Gawande deals in extenso with several European models as well as the Taiwanese one."

Thanks. I read it when it came out. But even though he mentions them, his models for change in the US seem to still be based on US case studies - positive outliers within a broken system, rather than looking to change the framework itself .

Posted by: jeirvine | June 24, 2009 3:05 AM | Report abuse

So you think doctors make too much? Start cutting their pay more. Then fewer people will go into medicine *or* the quality of people going into medicine will decline.
No, they don't make too much money for the work they do. Look how much training it takes.
So now more of our 'best and brightest' will go to law school. Great, just what we need, more lawyers.

Posted by: atlmom1234 | June 24, 2009 8:34 AM | Report abuse

Gawande’s “Cost Conundrum” could be to health reform what Sinclair’s “The Jungle” was to food safety. It explains current trends in the commercialization of medicine better than virtually any journalistic work I've seen.

Sadly, it appears that its author is now more inclined to “stay above the fray” than to try to articulate and lobby for the regulatory infrastructure necessary for the cultural change he so eloquently advocates.

I explain why here:

Posted by: pasqualefrank | June 24, 2009 10:15 AM | Report abuse

staticvars -- neither you nor Messrs. Friedman or Stossel realize that even if you do away with the insurers, the decision-maker is still spending someone else's money when it comes to healthcare. That is, the doctor is spending the patient's money.

I'll use the example of my cousin who just had a foot surgery to remove a bone spur. She didn't wake up one morning and say "My foot hurts, I'm going to go buy a surgery." She woke up one morning and said, "My foot hurts and I need an expert to tell me why, and what to do about it." If her doctor had said it needed "watchful waiting" she would have done that. If he had suggested massage therapy, she would have done that. He said "surgery," so she did that.

Like 99 percent of all patients, she neither second-guessed nor overruled her doctor, even though it was her money to spend (she has an HSA).

If you really think that eliminating third-party pay would contain costs, you're nurturing an illusion of control you simply don't have. Regardless of who pays the bill -- an individual or an insurer -- no one would willingly choose a medical alternative that was more intensive/more invasive/longer recovery. We do it because someone with an MD or DO after their name says so.

Control the providers and you control the costs. It is really that simple. And it is really that hard.

Posted by: Rick00 | June 24, 2009 10:34 AM | Report abuse

atlmom1234: "So you think doctors make too much? Start cutting their pay more. Then fewer people will go into medicine *or* the quality of people going into medicine will decline."

Keep battling that strawman and you might win.

Posted by: BigTunaTim | June 24, 2009 11:41 AM | Report abuse

Kinda interesting. 50 years ago doctors owned hospitals. You got sick, you went to the hospital. After Medicare got started, people began to notice the conflict of interest. They made it illegal for doctors to own hospitals, which were reorganized as nonprofits (yes, they were always nominally nonprofits, but this made them more nonprofit).

Now hospitals started to get concerned about the length of hospital stay. The turnaround and fallout in the 80s was quite dramatic. Today the trend is to grease the skid and shoot you out the door, to a nursing home or your own home for recovery.

The cost of home care will usually be dramatically less than nursing home care, but it seems obvious you can't let the doctors collect fees as board members for businesses they refer patients to.

Posted by: serialcatowner | June 24, 2009 12:16 PM | Report abuse

It's not the physician pay that's the problem. It's the distribution. U.S. specialists earn about what European specialists earn with respect to what other people make in their respective countries. However, there are two US specialists for every one generalist which is the reverse of the European ratio. That results in very expensive, somewhat disjointed medical care. Studies have shown that increased primary care decreases costs and increases quality. At the Mayo, specialists are not incented to perform primary care functions. In the community, they are -- because there are so many of them that they can't support themselves without it. At the Mayo there is also cultural pressure on the generalists to take on the appropriate level of care. In the community, the cultural pressures push the generalists to kick care up to the specialty level.

A German or a Brit with a couple of minor medical problems will usually see a generalist for care. Here in the US that's less likely. If, for instance, you have several minor medical problems, say maybe mild asthma, hypertension, and hypothyroidism, you may see a specialist for each. However, the pulmonologist may be happy to treat your asthma, but won't touch your thyroid disease and the cardiologist will adjust your blood pressure but refuse to renew your asthma inhaler. Many people perceive this specialty care as "higher quality". So for this example, if you want the "best quality" care you may wind up seeing three specialists each charging 50% more than a generalist and paying a total of 450% compared to generalist care. It's not that the incomes are out of line with Europe, it's that the use of care is distorted. Interestingly, European health care systems are attempting to curtail rising costs by restricting (inappropriate!) access to specialty care.

European vs. U.S. physician income. Note that French docs are the beneficiaries of an enormous tax break and effectively make a lot more money than is reflected in this report.

Posted by: J_Bean | June 24, 2009 1:14 PM | Report abuse

My link did not show up. European vs. US MD income:

Posted by: J_Bean | June 24, 2009 1:17 PM | Report abuse

I am a private practice OBGYN doctor in a large group in the Texas Medical Center in Houston. I have been involved in the management of our business for the last 17 years. The medical business is like any other business over this time, margins are getting thinner and operating expenses are going up. The ability to offer compassionate expert care to your patients relies on your ability to remain a viable business. The push for physician investment in the facilities or ancillary piece was driven by the declining reimbursement in the medical services piece. Dr. Gawande does not recognize or fails to mention the hidden subsidies of the salaried doctors that he refers to. We have a great example in one of our Nation's premier medical schools in Houston of the medical services piece not being able to support the salaried physicians without the facilities piece or the ancillary piece that is owned by the hospital. Where do you think the profits from the Mayo Clinic Surgery Centers and Imaging Centers go? They support the salaries of the medical staff. To compare apples to apples, you have to correct for the NIH grants, the endowed chairs, the not-for-profit subsidy, the profit margins of each of the cost centers in the integrated medical systems, etc.. Take away all opportunities to capture lost revenues by a medical group, put all of the doctors on salaries within integrated systems, let their salaries be subsidized by the same profit centers that are currently subsidizing them both privately and publicly, and you will have wiped out private practice medicine. Private practice medicine is what is at risk of being lost here. If you are a good doctor, you take good care of me, you have nice office staff who handles my needs to my satisfaction, then I will keep coming to you and tell my friends to come to you. Let me assure you, that is a more difficult job description to fill everyday than being a salaried employee. Watch out what you wish for!

Posted by: mcmd | June 24, 2009 1:36 PM | Report abuse

"It's kind of ridiculous that there haven't been very many people putting feet on the ground and studying what the positive deviants are doing. There are hundreds of examples out there. They're not just the Mayo Clinic and not just Grand Junction. . . These are places that are doing something differently."

AGREED! How about a study of Santa Cruz County, in northern California (Ezra's old stomping grounds)? We spend 10% less than less per Medicare beneficiary than the national average -- yet we have the HIGHEST HOSPITAL WAGE INEEX IN THE COUNTRY, due to our high cost of living. Clearly Santa Cruz is doing something right. Any ideas?

Posted by: leslie14 | June 24, 2009 1:52 PM | Report abuse


A great interview--so glad you did this.

It was so important to give Gawande a chance to repond to the misinformation that those who oppose reform put out there after his piece came out in New Yorker and gained so much public atention.

Posted by: mahar1 | June 24, 2009 10:14 PM | Report abuse

This is a very good follow up to the original New Yorker article. As Dr. Gawande notes, there ARE changeswhich we can make to the reimbursement system right now that will change the incentives to provice the wrong care, and incent doing theright thing. I write about how to transform primary care on my blog:

Posted by: DrDaveLynch | June 29, 2009 6:41 PM | Report abuse

Gawande makes interesting points here but let's shed light on a few issues:

1. Academic medicine(the Mayo) is not private practice medicine. They operate in very different ways and have little comparisons. He is wrong to make the connection.

2. Taking extreme cases(McAllen) is fine to more dramatically point out the problems in a system. Using them as guiding principles is dangerous.

3. European healthcare does not have better outcomes period. What is never talked about when numbers for their system are thrown out is the benchmarks they are measuring from. Take infant Europe its "better"..well on closer inspection, the viability age in Europe is 28 weeks. Many infants born below 1 pound or 28 weeks are not provided care and left to expire after they are born. They are considered still births. Here vability is 24 weeks and much of the care is mandated by the government i.e even if a parent does not want intervention, the state mandates physicians to provide it to protect children. This makes a major difference in outcome, cost and complication rates. Another example, breast cancer survival rates in the UK are at or below 40%, ours are 30-40% higher...why? Because we have cutting edge drugs that all are able to obtain and we do cutting edge surgery. The list goes on.

4. To those who think Europeans are not paying for healthcare, check out there taxation rates..the countries that offer more tax more..there is no free lunch.

5. To those that think doctors are making too much money. Please factor in physicians are working 60-90hrs/week, 48 weeks/ this math with your numbers and then see if you think the financial rewards are incredible. Also factor in a delay in earnings after college of anywhere from 8-12 years, medical school loan burden on average $150-200K, and malpractice premiums from $50-250K/yr before you hang a shingle, buy a car, buy a home or pay for the start of the rest of your Europe and elsewhere this does not exist..

6. Be careful what you wish for, there is no free lunch..if you look to the North, Canadians are demanding a different healthcare system because low and behold the one they have is not working for about Natasha Richardson's case as an example of Canadian trauma care.

Posted by: MN60 | July 1, 2009 3:18 AM | Report abuse

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