Monday, October 18, 2010

Lower Costs in Grand Junction: More Primary Care, Less High Tech

Grand Junction, Colorado, and particularly the medical care system in Grand Junction, Colorado, has been getting a great deal of publicity since the health care debate began, because it is a community with lower health-care costs, combined with high health status, compared to much of the country. While well-known to health policy analysts for many years, and particularly featured in the analyses of the Dartmouth Atlas of Health Care, it gained greatest fame when Dr. Atul Gawande published “The Cost Conundrum” in the New Yorker in June, 2009. While the focus of the article was the exceedingly high per capita cost for Medicare in the border town of McAllen, Texas, including how unfavorably those costs compared to the other border town of El Paso, Grand Junction was prominently cited as a community in which Medicare costs, and all health care costs, were exceptionally low. This little town on the western slopes of the Rocky Mountains has become a potential model for those who believe health care costs can be controlled while maintaining or increasing quality, and a bugbear for those (mostly those profiting from medical care, or funded by corporations that so profit) who fear limits on medical costs.

The most recent, and brief and pithy, article, “Low-cost lessons from Grand Junction, Colorado”[1] comes from Thomas Bodenheimer and David West in the October 7, 2010 issue of the New England Journal of Medicine. They cite the statistics on health care and costs in Grand Junction and Mesa County from the Dartmouth Atlas: “…average per capita Medicare spending in Grand Junction was $6,599 in 2007 — 24% lower than the national average and 60% below high-cost Miami”, while maintaining high quality, including high performance on preventive metrics. They note that “…data on mortality and morbidity from the Robert Wood Johnson Foundation and the University of Wisconsin's County Health Rankings database show that the population of Grand Junction's Mesa County is far less healthy than those of some U.S. counties with high Medicare costs (, although it is number one in Colorado in the quality of clinical care provided. One would expect less-healthy communities to have higher costs.”

Bodenheimer and West cite 7 characteristics of the Grand Junction medical system that they believe are responsible for this situation and might be replicable (if “generally not without political battles”):

These are leadership by the primary care community; a payment system involving risk sharing by physicians; equalization of physician payment for the care of Medicare, Medicaid, and privately insured patients; regionalization of services into an orderly system of primary, secondary, and tertiary care; limits on the supply of expensive resources, including specialists, beds, and equipment; payment of primary care physicians for hospital visits; and robust end-of-life care.”

The payment system is based upon the Rocky Mountain HMO, begun in the 1970s and involving most of the providers in the western slope. This HMO gained the attention of scholars years ago, and was described in a case study by Wellever and Moscovice in the Journal of Rural Health in 1998.[2] One of the key parts of the “Rocky” is that it contracts with both Medicare (via a Medicare Advantage program) and Colorado Medicaid, so that providers, who are largely independent in solo or small groups, are paid more or less a single rate, regardless of the insurance (Medicaid, Medicare, or contracted with Rocky via an employer). This makes costs and reimbursement much more predictable and allows physicians to provide the appropriate care for patients, without trying to figure out what their insurance will pay for. It provides the physicians with the security that would, in fact, characterize a single-payer system.

The other critical component is not only leadership by primary care (and predominantly family) physicians, but an appropriate balance between primary care doctors and specialists, and a limitation on the expansion of procedural services that may not be necessary. The key quotation from Bodenheimer and West here is “Because only one hospital can offer interventional cardiac procedures, there isn't room for many cardiologists in Grand Junction; with such limits on facilities and workforce, the rates of such procedures remain low. The same applies to other types of expensive procedures.”

This is entirely the opposite of what happens in most communities, in which competing hospitals seek to add more facilities and hire or contract with more subspecialist physicians in order to increase the income of both physicians and the hospital. As I have discussed in the past (e.g., Cancer Care and Hospital Advertising, January 16, 2010; Doctors, their Patients, and Health Reform, August 6, 2009) and as the Dartmouth Atlas makes clear, the number of expensive services provided to patients is very different in different parts of the country, and demand is very “elastic”; that is, it is often determined not by need but by the availability of physicians and facilities. That is, supply drives demand, rather than vice versa. Hospitals in other communities compete for doctors and patients (insured patients, let us be clear!) so that they can have a bigger “market share”. This “business” rather than health, approach, can be insidious, destructive, and expensive enough, with overbuilding resulting in overcapacity. More serious, however, as Kelly reminds us,[3] than seeking a bigger market share is the complementary business practice of expanding the market – finding new “customers” for your product – in this case, high cost procedures.

Do I know if the number of interventional cardiac procedures (or any other procedures) done in Grand Junction is the “right number”, or if the system that exists there and limits them means that too few are done? No, of course not. We can look at data cited by Bodenheimer and West that suggest that it is not far off, that health status is not decreasing, and that preventive services on discharge are higher than average. But I do know that there is a “right number” and that it is determined by the health status of the patient population and the risk/benefit ratio from doing procedures, not by the driver of “more is better”. Arguable for other consumer goods (e.g., cars, music, toothpaste), the idea of “expanding the market” for expensive medical procedures – widening the field of those who are “eligible” so that we can have “more business” and make more money, is outrageous and immoral, as well as ridiculously expensive. This is true for procedures which are highly advertised and of little or no medical value as well as for procedures that can be important and lifesaving when utilized appropriately in the right patients. The money not spent on unnecessary high-tech procedures can provide more primary care to more people, and improve health outcomes.

Grand Junction, Colorado may not have all the answers to our health care system, any more than Canada or Britain or Switzerland do. But it is doing a lot of things right, it is saving money, and it is improving the health of the community, and that’s a lot more than most areas in the US are doing.

[1]Bodenheimer T, West D, “Low-cost lessons from Grand Junction, Colorado”, NEJM 7Oct2010;363(15):1391-3
[2] Wellever A, Moscovice I, “Rocky Mountain HMO”, J Rural Health. 1998 Summer;14(3):211-23
[3] Kelly PJ, Personal communication.


bds43 said...

Reading this made me think of a recent report that our UNC Healthcare System just raised the salary its lead heart surgeon a reported (though possibly remembering the exact figure incorrectly it was in any event a huge figure) $600,000 from $375,000 in order to keep him around. The reasoning was that the hospital could not afford to lose the revenue that the heart transplants and other major heart operations bring in. This, to me, represents a good example of how we magnify the costs of our services while ignoring the duplication that comes in a region such as ours, where Duke and Wake Medical Center also offer these same costly services. If the medical centers at UNC, Duke and Wake County were working cooperatively to provide the health care services for the Triangle instead of competing with one another, I suspect, as in Grand Junction, we would be able to reduce the costs simply by virtue of making efficient use of the available resources and not duplicating expensive facilities. It is an example where the application of capitalistic principles is not the best solution.

I am also struck by the virtual single payer system that has been formed in Grand Junction. That is probably the single most powerful factor in the control of costs in that system. It's so obvious that a single payer system would make such a difference nationally. I continue to be amazed at the obdurate resistance on the part of politicians in accepting it. Such a good example of how big business (here health insurance corporations) are controlling what we are getting by way of policy.

Canyon Country said...

I've been trying to understand the Grand Junction situation since moving here in 2011. After reading Dr. Gawande's New Yorker article, I was looking forward to low cost, high quality health care. Unfortunately, although quality of care is probably high, the low per-beneficiary cost for medicare patients listed in the Dartmouth Atlas does not extend to the rest of the patient community. RMHP's insurance costs (see CO's health insurance exchange website) are consistently 30% higher than insurance available on the Front Range, and I was stunned to find that employer-provided insurance for a 60 year old would run $14666 per year (and yes, that's for one person). Those are McAllen, TX costs!
In trying to research the details, I've concluded that it's likely that RMHP is pooling reimbursements and premiums in such a way that the individual/employer market is subsidizing the medicare market. I am still trying to learn how this all works, as I saw a 40% increase in my RMHP individual insurance premium in 2013, and am looking forward to another 20% increase next year. This is truly a concern since I have 8 years to go before Medicare kicks in. The real conundrum in this case is why medicare patients can cost so little while the rest of us cost so much!

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