Atul Gawande is a surgeon who teaches/practices at Harvard Medical School. He recently wrote a piece in the New Yorker that was very intriguing. Basically, Medicare costs per enrollee are more than twice as high in McAllen, Texas compared to the national average, but health outcomes and quality of care are not better. On the whole, physicians are ordering more tests, scheduling more office visits, and performing more procedures in McAllen, driving up the costs of health care. The pattern in McAllen reflects the plight of the US - more $$ invested in medical care per person, yet only average returns in quality. Dr. Gawande proposes local/regional accountability groups for physicians and a salary-based physician payment system modeled after the Mayo Clinic, which has Medicare costs below the national average, yet maintains high quality.
Check out the article: http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande