This past Saturday, President Obama stopped in to talk about healthcare reform at a town meeting in Grand Junction, CO, a community of 120,000 people on the western slope of the Rocky Mountains, which is described as having "one of the lowest cost, highest quality healthcare systems in the country" in a new report.

"How are you going to save money in the healthcare system? You're doing it here in Grand Junction," Obama told the crowd. "You know that lowering costs is possible if you put into place smarter incentives; if you think about how to treat people and not just illnesses; [and] if you look at problems facing not just one hospital or physician, but many systemwide problems."

"That's what the medical community in this city did, and now you're getting better results while wasting less money," he added.

So what is so special about Grand Junction—and puts it on the opposite end of the scale occupied by McAllen, TX, which was cited earlier this year in a New Yorker article for practicing inefficient care?

Grand Junction does not have an integrated system, and most of its healthcare payers and providers are unaffiliated—just like the majority of the country, says the report published by the New America Foundation. However, this Colorado community boasts "consistently excellent patient outcomes at relatively low cost."

The Dartmouth Atlas of Health Care rates Grand Junction as having one of the "most efficient medical communities in the nation," according to the report. In 2006, average Medicare spending per capita was $5,900, about 30% lower than the national average of $8,300 and only a third that of high cost areas such as McAllen. Grand Junction also rated higher on measures of medical quality with low readmission rates to hospitals and among the lowest number of average days spent in the hospital by individuals at the end of their lives.

So what lessons does Grand Junction offer to the national reform debate? The report offers four examples:

Lesson #1: Vision and incentives are "essential to an operational sense of community," the report says. Grand Junction’s leaders view their own self interest—and the community’s interests—as congruent, and this fosters "a profound sense of community capable of withstanding the pressures of more than 30 years of health system and societal change."

In a nutshell, "aligned incentives help drive providers to work together" to better serve patients and the community. Grand Junction’s major health players are "united by a sprit of cooperation and recognized mutual self interest," the report notes.

Lesson #2: Information systems and data sharing have been essential for collaboration and trust. The electronic records system and the interoperability provided by the community financed Quality Health Network, which was created as a repository of patient data for the entire medical community, enable evidence based collaboration on complex and high cost cases among institutions and clinicians.

Lesson #3: Complementary institutions pursuing their comparative advantages use collaboration. Grand Junction’s providers allow specialized complements—for instance, prenatal care at one healthcare organization and hospice and palliative care at another—that permits focus on specific populations to ensure that all residents "get the right care at the right time."

This attitude contrasts with other communities where providers compete aggressively for all patients—and the revenue that accompanies them—resulting in the delivery of lower quality and higher cost care, the report says. This distribution of care means that high quality, efficient care by each organization is "beneficial to all of Grand Junction’s institutions" and allows all of them to "focus on what they do best."

Lesson #4: Primary care is the core of any high-performance health system, and throughout a patient’s life, primary care physicians in Grand Junction are involved in all levels of treatment. This continuity and collaboration among primary care physicians, specialists, and other members of care teams leads to higher quality care, better outcomes, and lower costs.

Much of this team based care refocuses the delivery system on the patient—not on the provider. However, this care may be in jeopardy through extreme shortages of new primary care physicians entering the workforce.

Two top administration officials signaled that the White House may be willing to jettison a controversial government-run insurance plan favored by liberals. Health and Human Services Secretary Kathleen Sebelius opened the door to a compromise on a public option, saying it is "not the essential element" of comprehensive reform. White House press secretary Robert Gibbs said that Obama "will be satisfied" if the private insurance market has "choice and competition."

The Miami operator of 11 shell corporations that billed Medicare for $123 million in bogus durable medical equipment claims has pleaded guilty to Medicare fraud in federal court.

Reinaldo Guerra will be sentenced on Nov. 13.

According to the documents attached to the plea, Guerra owned 11 corporations that purported to supply DME to Medicare beneficiaries. He used straw owners to disguise his control over the companies and submitted approximately $123 million in fraudulent claims to Medicare for DME that had not been ordered by a physician nor delivered to a Medicare beneficiary. Based on those claims, Medicare paid Guerra’s DME companies $35 million.

Federal prosecutors have long acknowledged that Miami and South Florida are a Medicare fraud hotbed.

In March 2007, the Department of Justice established a Medicare fraud strike force in Southern Florida that has filed about 100 indictments charging more than 170 people with fraud. However, there is also concern that the fraudsters are migrating to other parts of Florida and the country as investigations intensify in South Florida.

In May, U.S. Attorney Eric Holder said that during the first year of strike force operations in Miami, the federal government estimated that billing for durable medical equipment fell by $1.75 billion in claims and $334 million in payments.

As Congress debates a national healthcare overhaul, state experiments like Tennessee's are informing the discussion. As originally envisioned, the Tennessee plan expanded Medicaid to cover people who couldn't afford insurance or who had been denied coverage by an insurance company. Unlike Massachusetts's more recent universal coverage law, the TennCare plan is most often cited by opponents. They say TennCare's runaway costs show that the public health-insurance proposal by House Democrats could bankrupt the federal government.