Health Care

The Hot Spot Strategy for Cutting Health Care Costs

January 20, 2011
by Celeste Fremon
5 Comments


This week, while Republican congress-members posture irritatingly about repealing health care reform, the New Yorker has an excellent new article by Atul Gawande in which Gawande that contends that one of the main ways to lower the ever-rising health care costs is not by cutting back on services, but by providing more intensive services to the, say, 10 percent of chronically ill patients who incur the hugest costs with long stays in hospital rooms and intensive care units.

(Gawande, is a surgeon who teaches at the Harvard Med School and at the Harvard School of Public Health. He is also a staff writer for the New Yorker.)

Unfortunately, the article is hidden behind the New Yorker’s usual paywall, but Gawande is interviewed on NPR’s Fresh Air on Thursday and the interview is definitely worth your time.

The concept is akin to the practice among the LAPD and other modern law enforcement agencies of throwing a big chunk of police resources at the ten percent of lawbreakers who cause most of the crime.

One of the physicians he profiles, Jeff Brenner, is a family practitioner working in Camden, N.J. In 2007, Brenner started treating chronically sick people who accounted for a significant percentage of the health care costs in Camden.

Brenner was operating under a hypothesis: He figured that the people who had the highest costs in the health care system were also getting the worst care. By helping them, he could also lower the health care costs — not just for them but for the entire city of Camden.

After three years, Brenner and his team appear to be having a major impact. Gawande writes that his patients “averaged 62 hospital and E.R. visits per month before joining the program and 37 visits afterwards — a 40 percent reduction. Their hospital bills averaged $1.2 million per month before and just over half a million after — a 56 percent reduction.”

That net savings, Gawande tells Fresh Air’s Dave Davies, is absolutely “revolutionary.”

Listen to and/or read the rest.

5 Comments

  • We have a “health care crisis” and the world’s highest physician salaries have half the number of doctors per capita and because we turn away 60% of the applicants to medical schools. The “medical cartel” which restricts the supply of physicians, which gives doctors monopoly power to charge 2-5 times higher prices for their services.

    In his book Capitalism and Freedom, Milton Friedman describes the American Medical Association (AMA) as the “strongest trade union in the United States” and documents the ways in which the AMA vigorously restricts competition.

    France, Italy, Spain, Germany, Greece, Russia, Isreal, Switzerland all have 50%-100% more doctors per capita then the United States.

    How could this 10% that’s discussed here, get the care needed with half the doctors at double the price?

    “There are 130 medical schools in the U.S. (data here), which is 22% fewer than the number of medical schools 100 years ago (166 medical schools, source), even though the U.S. population has increased by 300%. Consider also that the number of medical students in the U.S. has remained constant at 67,000 for at least the period between 1994 and 2005.”

  • France has the highest rated health care system in the western world mainly for two reasons. First, doctors have a set salary the equivelent of about 110k US dollers per year with around 150k for specialists. Second, meds are about 25% the cost they are in the US and….they buy their meds from us- in bulk, wholesale. Another fine example of how control has slipped from our hands. It will be interesting to see how long a shelf life Gawande’s suggestion will have.

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