Atul Gawande examines why health costs are high some places and lower others

Atul Gawande, MDAs soon as you can, stop what you’re doing and devote 20-30 minutes to reading Atul Gawande’s important new article in the June 1 New Yorker, The Cost Conundrum: What a Texas town can teach us about health care.

I don’t claim to be an expert about cost issues but in my year-plus of listening to US healthcare discussions I’ve heard enough to know, from common sense, that it’s a big stinking tangled mess. The results are so dysfunctional that all signs indicate that the root cause must be perverse incentives. But the question is, where?

Every whichway you turn in these discussions people have a ready explanation for why they’re not at the root of the problem. Gawande appears to do a superb job of carefully selecting matched pairs of cities and situations to reveal whether the proposed issue does in fact make any difference. Care quality? No. Overall health of the population? No. And so on.

Gawande is a surgeon and a superb writer who knows his way around an argument. My gut says that from this moment forward nobody can claim to be well versed in health reform issues – and informed choice – if they haven’t absorbed this 7,800 word article.


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14 Responses to “Atul Gawande examines why health costs are high some places and lower others”

  1. ePatientDave says:

    As soon as you can, stop and spend 30 min on Atul Gawande’s new article about HC costs. (My quick post:

  2. ePatientDave says:

    @TrishaTorrey @jrh3 CNN “divorcing consumers from true cost of their health care” Yes see

  3. The article is fantastic but long.
    So if you have only 1 minute here is what summarizes it:

    “Activists and policymakers spend an inordinate amount of time arguing about whether the solution to high medical costs is to have government or private insurance companies write the checks.

    Here’s how this whole debate goes:

    Advocates of a public option say government financing would save the most money by having leaner administrative costs and forcing doctors and hospitals to take lower payments than they get from private insurance.

    Opponents say doctors would skimp, quit, or game the system, and make us wait in line for our care; they maintain that private insurers are better at policing doctors.

    No, the skeptics say: all insurance companies do is reject applicants who need health care and stall on paying their bills.

    Then we have the economists who say that the people who should pay the doctors are the ones who use them. Have consumers pay with their own dollars, make sure that they have some “skin in the game,” and then they’ll get the care they deserve.

    These arguments miss the main issue. When it comes to making care better and cheaper, changing who pays the doctor will make no more difference than changing who pays the electrician. The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care. Otherwise, you get a system that has no brakes.

  4. ePatientDave says:

    @TrishaTorrey @jrh3 CNN “divorcing consumers from true cost of their health care” Yes see

  5. Atul Gawande examines why health costs are high some places and lower others. #healthcare #healthreform (

  6. […] “The cost conundrum. What a Texas town can teach us about health care”.  Segnalata da e-patient Dave, è ben scritta ma piuttosto lunga, quindi […]

  7. Jerry Brady says:

    This article was important for its cut-through clarity the moment it was published. But then Obama read it and waved it at his health honchos so, as the New York Times reported today, McAllen, Texas, has become the center of the health care debate. Every advocate must confront Atul Gawande. That’s quite an accomplishment, even by New Yorker standards. It could be a pivotal piece in the health care debate. I’m persuaded and will write about it Sunday in our newspaper.

  8. Hi Jerry –

    I’m not clear on what you mean by “every advocate must confront” him. Do you mean anyone who’s advocating any change must confront the reality that Atul described, or are you saying something else?

    Great to have you here. Let us know how we can help. epatientdave at

    (Everyone, unless I’m guessing wrong, this is the Jerry Brady who has quite a strong history in Washington and in his family’s media companies.)

  9. Gary Franklin says:

    Atul Gawande’s article is right on target. I have been writing haikus on health care reform on Twitter-these are affectionately called twaikus! Please access these twaikus and provide feedback and other ideas-the Twitter username is doctwaiku ( Thanks!


  10. […] and expanded on teh theme of his groundbreaking article “The Cost Conendrum” that was reviewed on this […]

  11. […] insurance companies?  Frankly, these two priorities are increasingly at odds with each other.  As Atul Gawande’s celebrated New Yorker piece reminds us, patients are best served, at the lowest cost, in locations where the medical culture is […]

  12. Les says:

    Why can’t the patient be the one accountable for her health care? If there were a reasonably understandable measurement system, and if there were readily available data on these measurements, the patient could select providers that are most cost-efficient. That would be incentive to operate other successful “Mayo clinics.”

  13. Just discovered my own May09 post:) – had just discovered US HC is "a big, stinking, tangled mess" :-)

  14. Bert says:

    What Is Guardian Life Insurance Trying to Hide?

    Guardian Life Insurance Company of America, through its outside counsel law firm, Leader & Berkon LLP, deposed a non-party witness, John Zaher of The Public Relations and Marketing Group, LLC. The deposition, which was sought under the guise of determining if a confidentiality agreement was violated, had no legal basis related to Dr. Berton Forman’s $12 million lawsuit against Guardian, but was instead held merely to harass and intimidate Dr. Forman and Mr. Zaher as a way to prevent them from exercising their rights to free speech and to educate the public about the tens of billions of dollars in insurance fraud that occurs overall each year.

    The attorneys at Leader & Berkon LLP — the law firm representing Guardian — sought a deposition of Mr. Zaher late last year, but, after initially granting a temporary restraining order in preventing the deposition from going forward, the court subsequently granted them a very limited deposition. On January 28, the deposition was held, during which the attorney representing Guardian continuously sought to go beyond the limited scope authorized by the court and to harass and intimidate Dr. Forman and Mr. Zaher. Meanwhile, the law firm was presumably billing Guardian at a rate of hundreds of dollars per hour. The deposition, lasting several hours, was pointless and did not deal with the facts of the case. Rather, it only served to increase legal fees to benefit Leader & Berkon and to create a chill on Dr. Forman and Mr. Zaher’s rights to free speech. Rather than stick to the issues such as healthcare fraud, Guardian’s outside counsel went on a fishing expedition, asking Mr. Zaher questions that were irrelevant to the case and outside the scope granted by the court.

    Guardian had earlier attempted to dismiss Dr. Forman’s lawsuit but the New York State Supreme Court denied the motion. Guardian later appealed the decision, which was upheld by The N.Y.S. Supreme Court, Appellate Division, First Department, finding that the suit could proceed to trial on each and every count — a major blow to Guardian and its efforts to sweep Dr. Forman’s lawsuit under the rug and proceed with business as usual.

    Dr. Forman, a 25-year veteran anesthesiologist and owner of a patent for healthcare fraud software, was engaged by Guardian over a six-year period to find overbilling and fraud on the part of doctors and hospitals, for which Dr. Forman would receive a fee of 25% of all recovered funds. Upon reviewing hundreds of thousands of claims provided by Guardian, Dr. Forman identified tens of millions of dollars in overbilling and fraudulently paid claims. He discovered that large hospital groups were, in many instances, triple billing or using incorrect codes on claims they submitted to Guardian for payment. Considering that his patented software is able to discover fraudulent billing for anesthesia, the case reveals just how rampant insurance fraud is, when you take into account other areas of medicine, amounting to tens of billions of dollars per year, according to health industry experts.

    The lawsuit alleges that Guardian failed to pursue the unrecovered monies due to its having entered into separate contracts with Preferred Provider Organizations (PPOs). Despite entering into such agreements, Guardian asked Dr. Forman to perform audits of claims from providers that were part of the PPOs’ plans. Guardian’s contracts with the PPOs effectively precluded any possibility of recovery by Dr. Forman for nearly all of the claims that Guardian asked Dr. Forman to audit.

    “This deposition was only to harass and intimidate myself and PRMG,” Dr. Forman said. “But it begs the question: What does Guardian have to hide? What is it about the case that Guardian doesn’t want its ratepayers or regulators to know about?”

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