It is spring in McAllen, Texas. The morning sun is warm. The streets are lined with palm trees and pickup trucks. McAllen is in Hidalgo County, which has the lowest household income in the country, but it’s a border town, and a thriving foreign-trade zone has kept the unemployment rate below ten per cent. McAllen calls itself the Square Dance Capital of the World. “Lonesome Dove” was set around here.

McAllen has another distinction, too: it is one of the most expensive health-care markets in the country. Only Miami—which has much higher labor and living costs—spends more per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average. The income per capita is twelve thousand dollars. In other words, Medicare spends three thousand dollars more per person here than the average person earns.

The explosive trend in American medical costs seems to have occurred here in an especially intense form. Our country’s health care is by far the most expensive in the world. In Washington, the aim of health-care reform is not just to extend medical coverage to everybody but also to bring costs under control. Spending on doctors, hospitals, drugs, and the like now consumes more than one of every six dollars we earn. The financial burden has damaged the global competitiveness of American businesses and bankrupted millions of families, even those with insurance. It’s also devouring our government. “The greatest threat to America’s fiscal health is not Social Security,” President Barack Obama said in a March speech at the White House. “It’s not the investments that we’ve made to rescue our economy during this crisis. By a wide margin, the biggest threat to our nation’s balance sheet is the skyrocketing cost of health care. It’s not even close.”

The question we’re now frantically grappling with is how this came to be, and what can be done about it. McAllen, Texas, the most expensive town in the most expensive country for health care in the world, seemed a good place to look for some answers.

From the moment I arrived, I asked almost everyone I encountered about McAllen’s health costs—a businessman I met at the five-gate McAllen-Miller International Airport, the desk clerks at the Embassy Suites Hotel, a police-academy cadet at McDonald’s. Most weren’t surprised to hear that McAllen was an outlier. “Just look around,” the cadet said. “People are not healthy here.” McAllen, with its high poverty rate, has an incidence of heavy drinking sixty per cent higher than the national average. And the Tex-Mex diet has contributed to a thirty-eight-per-cent obesity rate.
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It looks like a few rule changes have dramatically lowered the number of malpractice suits filed in Pennsylvania. There were 1,602 filings last year, a 41% decline from the annual average between 2000 and 2002, before the changes were put in place.

One of the new rules requires a “certificate of merit” from a medical professional, establishing that “the medical procedures in a case fell below applicable standards of care,” according to a recent statement from the Administrative Office of Pennsylvania Courts. Another rule requires cases to be filed in the county where the alleged malpractice took place — an effort to discourage so-called venue shopping, where cases would be filed in counties thought to be sympathetic to plaintiffs.

The number of malpractice cases fell sharply in 2003, when the rules were in place, and have stayed down.

“The results have been extraordinarily impressive in abating the malpractice insurance crisis,” Pennsylvania’s governor said yesterday, the Philly Inquirer reports.

The president of the state’s medical society told the paper the decline in cases is encouraging, but said malpractice insurance rates in the state are among the costliest in the country. A spokesman for the society told the Health Blog that, for the most part, state doctors’ malpractice premiums have been stable or decreased slightly since 2002.

A representative of the state’s trial lawyers group told the Inquirer the group was satisfied with the rules, partly because there are no longer calls for caps on awards in the state.

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The Nevada Supreme Court is taking aggressive steps to resolve a lingering problem in the District Courts of Clark County—a backlog of medical malpractice cases.

During the month of May, two-judge teams of senior judges will conduct settlement conferences in medical malpractice cases at a rate of two a day. Eighteen or more conferences will be set each week. This process has been referred to as the “medical malpractice settlement marathon.”
Justice Michael Cherry, who supervises the Senior Judge Program, said the settlement program will target the 216 oldest cases. Of those, 109 were filed more than two years ago.

“This process will provide unique access to the justice system and to some of our most experienced judges,” Cherry said. “Attorneys with pending medical malpractice cases were sent letters about the settlement program and have been very enthusiastic about submitting their cases for the conferences.”
In his State of the Judiciary speech on March 24, Chief Justice James W. Hardesty told a joint session of the Nevada Legislature that “more than 400 medical malpractice cases are pending today.” These do not include the approximately 430 cases involved in the endoscopy litigation in Clark County.

“While the courts would like to have taken these non-endoscopy cases to trial within the time frames established by the Supreme Court and the Legislature, that simply could not be accomplished in nearly a quarter of these cases because there are not enough judges or courtrooms to do so,” Hardesty said in his address.
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In Washington, the Obama administration is promising to spend billions to make health care more efficient, but Jennifer Brull, a family doctor in rural Kansas, is already a step or two ahead.

A year ago, she switched her 3,000 patients from paper charts to electronic health records, a core feature of most plans for healing the nation’s ailing health system. Now, working with computers and printouts, her staff of part-time nurses and shared front-office workers has more time to help her meet the needs of patients.

“I’ll never go back to the old system,” said Dr. Brull, 37, who runs a solo practice in Plainville, Kan. “I can always look at the records by Internet, whether I am seeing patients at the nursing home or a clinic or the hospital, or even when I’m as far away as Florida. The change has been tremendously beneficial for my productivity.”

Patients are appreciative, too. Kagay Wheatley brings her 97-year-old neighbor, Charlotte Hayes, to Dr. Brull for blood tests every few weeks. “We do not have to sit and wait while the nurses search for the records,” said Ms. Wheatley, a retired school board aide who is also a patient of Dr. Brull’s. “They find the information right there on the computer, and when we leave, we get a printout of what we did and what she said.”

About 42 percent of active family doctors have installed some type of electronic health records, according to surveys and estimates by the American Academy of Family Physicians, a professional and advocacy group. One in four said they did not plan to purchase an electronic system, and many said they could not afford the $30,000 to $50,000 in start-up costs. The academy has 94,600 members, including about 60,000 in active practice.

Medical centers like the new 24-bed critical-access hospital in Plainville, connected by a walkway to Dr. Brull’s office, are also rapidly adopting electronic records.

“The use of electronic health records and being able to transmit X-rays allows us to be in contact with the whole world,” said Chuck Comeau, a hospital board member who is chief executive of Dessin Fournir, a national furniture design company that moved its head office to Plainville from Los Angeles.

Even so, 8 in 10 of all American doctors still labor in a world of paper. And some doctors said they encountered upsetting setbacks when they tried to switch to electronic records.

Michael Ferris, a 33-year-old emergency medicine physician in Parsons, Kan., said he had to give up his solo practice after he had invested $38,000 in software for systems that kept crashing and thwarting his attempts to send out electronic bills. “I was spending as much time trying to fix the computer and the billing as actually seeing patients,” he said, “and neither process was generating any revenue for me.”

Now, as director of the emergency room at the Labette County hospital in Parsons, Dr. Ferris said, “I get paid by the hour and don’t have to worry if the software is down.” But he said he expected that some day he would have to help the hospital make the transition to electronic records. “I know it is coming.”
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The incentives in the economic recovery act to encourage the conversion from paper to electronic health records could mean hundreds of millions of dollars for the state’s health care systems and doctors.

The emergency spending bill also could spur the final push needed to make paper charts a medical artifact.

“It’s going to drastically increase adoption,” said Michael Repka, executive director of the Independent Physicians Network, which negotiates contracts and provides other services for physicians in the Milwaukee area.

The long-awaited transition from paper to electronic records is considered essential if doctors and hospitals are to improve coordination of care, manage patients with chronic disease, lessen the wide variation in how medicine is practiced and monitor quality.

Electronic health records also will be a crucial component in any effort to link what doctors and hospitals are paid to the quality of care they provide instead of how many tests they order or procedures they perform.

The transition from paper to electronic health records is well under way in Wisconsin. The $19.2&enspbillion in incentives in the recovery act also will cover only a fraction of what health care systems are spending on health information systems. Froedtert & Community Health, for example, estimates its system will cost more than $70&enspmillion.

But the Wisconsin Hospital Association estimates the state’s large and midsize hospitals could receive $250&enspmillion – roughly $3&enspmillion to $4&enspmillion each – in incentives, starting in 2011.

“That’s a good chunk of money,” said Steve Brenton, the hospital association’s president.

The roughly 60 rural hospitals with fewer than 25 beds in Wisconsin could receive as much as $500,000 each under the spending bill, based on the hospital association’s estimates.

The incentives come at a time when health care systems are cutting back on capital projects because of huge losses incurred in their investment portfolios from the stock market collapse and because of flat or declining revenue as the economy buckles.

“Overall, this is extremely positive,” Brenton said. “It’s good for Wisconsin.”

The health care systems also will benefit from the incentives aimed at physician offices.

Under the spending bill, health care systems and physician practices can receive up to $44,000 for each doctor, nurse practitioner or other clinicians.

“It should spur physicians to do what they need to do,” said Repka of the Independent Physicians Network.

Nationally, only 4% of doctors’ offices had a fully functional system for electronic health records, while 13% had a basic system, with a minimum set of functions, according to a study published in June in the New England Journal of Medicine. An additional 16% of physician practices had bought a system but had yet to install it, and 26% said their practice was planning to buy a system in the next two years.
Money to speed change

The incentives in the American Recovery and Reinvestment Act are expected to quicken the pace.

“There finally is money on the table that is real money,” said Steven Waldren, a physician and director of the American Academy of Family Physicians’ Center for Health Information Technology.

Up to now, hospitals and doctors have borne the cost of converting to electronic health records while any savings from improving the quality of care, such as fewer medication errors, have gone to health insurers.

The incentives starting in 2011 will come through higher payments based on a complicated formula tied to Medicare or Medicaid.
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