Showing posts with label medicare. Show all posts
Showing posts with label medicare. Show all posts

Friday, June 19, 2009

Case study in health care abuse: McAllen vs. El Paso


“Come on,” the general surgeon finally said. “We all know these arguments [why Medicare costs are highest per capita in McAllen than anywhere else US] are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures. The surgeon came to McAllen in the mid-nineties, and since then, he said, “the way to practice medicine has changed completely. Before, it was about how to do a good job. Now it is about ‘How much will you benefit?’ ”

Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coördination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.
- Atul Gawande

http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all

With the health care debate in DC in full swing, controlling costs and usage are obviously key factors to any reform plan. We previously discussed comparative effectiveness analysis, and it will probably be a key ingredient to any American universal coverage program. This New Yorker piece clearly demonstrates why comp. eff. is long overdue to counter "zealously entrepreneurial" physicians and clinics. We know more care is more costly, but more care is not necessarily better for your health either. "The most expensive tool in medicine is a doctor's pen." I'd laugh if it wasn't so true. The author suggests that the abuses taking place by medical professionals in McAllen is analogous to unscrupulous mortgage brokers in the sub-prime mess. They just want to get as many patients through the door as possible and collect more commission (in some cases, illegal kickbacks). And like the financial industry, incentive systems are set up in medicine to reward these types of excesses, so it's a miracle when some communities like Grand Junction, CO or the Mayo Clinic like can actually buck the trend and offer better health outcomes for less money ("accountable care org's"). The story was written by a doctor too, so he is not just MD-bashing.

Some highlights from the article:

-McAllen... 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.

-Yet public-health statistics show that cardiovascular-disease rates in [McAllen] are actually lower than average, probably because its smoking rates are quite low. Rates of asthma, H.I.V., infant mortality, cancer, and injury are lower, too. El Paso County, eight hundred miles up the border, has essentially the same demographics. Both counties have a population of roughly seven hundred thousand, similar public-health statistics, and similar percentages of non-English speakers, illegal immigrants, and the unemployed. Yet in 2006 Medicare expenditures (our best approximation of over-all spending patterns) in El Paso were $7,504 per enrollee—half as much as in McAllen. An unhealthy population couldn’t possibly be the reason that McAllen’s health-care costs are so high. (Or the reason that America’s are. We may be more obese than any other industrialized nation, but we have among the lowest rates of smoking and alcoholism, and we are in the middle of the range for cardiovascular disease and diabetes.)

-And yet there’s no evidence that the treatments and technologies available at McAllen are better than those found elsewhere in the country. The annual reports that hospitals file with Medicare show that those in McAllen and El Paso offer comparable technologies—neonatal intensive-care units, advanced cardiac services, PET scans, and so on. Public statistics show no difference in the supply of doctors. Hidalgo County actually has fewer specialists than the national average. Nor does the care given in McAllen stand out for its quality. Medicare ranks hospitals on twenty-five metrics of care. On all but two of these, McAllen’s five largest hospitals performed worse, on average, than El Paso’s. McAllen costs Medicare seven thousand dollars more per person each year than does the average city in America. But not, so far as one can tell, because it’s delivering better health care.

-“[The reason for McAllen's high costs is] malpractice,” a family physician who had practiced here for thirty-three years said. “McAllen is legal hell,” the cardiologist agreed. Doctors order unnecessary tests just to protect themselves, he said. Everyone thought the lawyers here were worse than elsewhere.
That explanation puzzled me. Several years ago, Texas passed a tough malpractice law that capped pain-and-suffering awards at two hundred and fifty thousand dollars. Didn’t lawsuits go down? “Practically to zero,” the cardiologist admitted.
-In a 2003 study, another Dartmouth team, led by the internist Elliott Fisher, examined the treatment received by a million elderly Americans diagnosed with colon or rectal cancer, a hip fracture, or a heart attack. They found that patients in higher-spending regions received sixty per cent more care than elsewhere. They got more frequent tests and procedures, more visits with specialists, and more frequent admission to hospitals. Yet they did no better than other patients, whether this was measured in terms of survival, their ability to function, or satisfaction with the care they received. If anything, they seemed to do worse. That’s because nothing in medicine is without risks. Complications can arise from hospital stays, medications, procedures, and tests, and when these things are of marginal value the harm can be greater than the benefits. In recent years, we doctors have markedly increased the number of operations we do, for instance. In 2006, doctors performed at least sixty million surgical procedures, one for every five Americans. No other country does anything like as many operations on its citizens. Are we better off for it? No one knows for sure, but it seems highly unlikely. After all, some hundred thousand people die each year from complications of surgery—far more than die in car crashes.

-To make matters worse, Fisher found that patients in high-cost areas were actually less likely to receive low-cost preventive services, such as flu and pneumonia vaccines, faced longer waits at doctor and emergency-room visits, and were less likely to have a primary-care physician. They got more of the stuff that cost more, but not more of what they needed.

-In an odd way, this news is reassuring. Universal coverage won’t be feasible unless we can control costs. Policymakers have worried that doing so would require rationing, which the public would never go along with. So the idea that there’s plenty of fat in the system is proving deeply attractive. “Nearly thirty per cent of Medicare’s costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to the level in low-cost areas,” Peter Orszag, the President’s budget director, has stated.

-She wasn’t the only person to mention Renaissance [Hospital]. It is the newest hospital in the area. It is physician-owned. And it has a reputation (which it disclaims) for aggressively recruiting high-volume physicians to become investors and send patients there. Physicians who do so receive not only their fee for whatever service they provide but also a percentage of the hospital’s profits from the tests, surgery, or other care patients are given. (In 2007, its profits totalled thirty-four million dollars.) Romero and others argued that this gives physicians an unholy temptation to overorder.

-“In El Paso, if you took a random doctor and looked at his tax returns eighty-five per cent of his income would come from the usual practice of medicine,” he said. But in McAllen, the administrator thought, that percentage would be a lot less. He knew of doctors who owned strip malls, orange groves, apartment complexes—or imaging centers, surgery centers, or another part of the hospital they directed patients to. They had “entrepreneurial spirit,” he said. They were innovative and aggressive in finding ways to increase revenues from patient care. “There’s no lack of work ethic,” he said. But he had often seen financial considerations drive the decisions doctors made for patients—the tests they ordered, the doctors and hospitals they recommended—and it bothered him. Several doctors who were unhappy about the direction medicine had taken in McAllen told me the same thing. “It’s a machine, my friend,” one surgeon explained.

-Beyond the basics, however, many physicians are remarkably oblivious to the financial implications of their decisions. They see their patients. They make their recommendations. They send out the bills. And, as long as the numbers come out all right at the end of each month, they put the money out of their minds. Others think of the money as a means of improving what they do. They think about how to use the insurance money to maybe install electronic health records with colleagues, or provide easier phone and e-mail access, or offer expanded hours. Then there are the physicians who see their practice primarily as a revenue stream. They instruct their secretary to have patients who call with follow-up questions schedule an appointment, because insurers don’t pay for phone calls, only office visits. They consider providing Botox injections for cash. They take a Doppler ultrasound course, buy a machine, and start doing their patients’ scans themselves, so that the insurance payments go to them rather than to the hospital. They figure out ways to increase their high-margin work and decrease their low-margin work.

-In a few cases, the hospital executive told me, he’d seen the behavior cross over into what seemed like outright fraud. “I’ve had doctors here come up to me and say, ‘You want me to admit patients to your hospital, you’re going to have to pay me.’ ”
“How much?” I asked.
“The amounts—all of them were over a hundred thousand dollars per year,” he said. The doctors were specific. The most he was asked for was five hundred thousand dollars per year. He didn’t pay any of them, he said: “I mean, I gotta sleep at night.” And he emphasized that these were just a handful of doctors. But he had never been asked for a kickback before coming to McAllen.

-Powell suspects that anchor tenants play a similarly powerful community role in other areas of economics, too, and health care may be no exception. I spoke to a marketing rep for a McAllen home-health agency who told me of a process uncannily similar to what Powell found in biotech. Her job is to persuade doctors to use her agency rather than others. The competition is fierce. I opened the phone book and found seventeen pages of listings for home-health agencies—two hundred and sixty in all. A patient typically brings in between twelve hundred and fifteen hundred dollars, and double that amount for specialized care. She described how, a decade or so ago, a few early agencies began rewarding doctors who ordered home visits with more than trinkets: they provided tickets to professional sporting events, jewelry, and other gifts. That set the tone. Other agencies jumped in. Some began paying doctors a supplemental salary, as “medical directors,” for steering business in their direction. Doctors came to expect a share of the revenue stream.

-Something even more worrisome is going on as well. In the war over the culture of medicine—the war over whether our country’s anchor model will be Mayo or McAllen—the Mayo model is losing. In the sharpest economic downturn that our health system has faced in half a century, many people in medicine don’t see why they should do the hard work of organizing themselves in ways that reduce waste and improve quality if it means sacrificing revenue.

In El Paso, the for-profit health-care executive told me, a few leading physicians recently followed McAllen’s lead and opened their own centers for surgery and imaging. When I was in Tulsa a few months ago, a fellow-surgeon explained how he had made up for lost revenue by shifting his operations for well-insured patients to a specialty hospital that he partially owned while keeping his poor and uninsured patients at a nonprofit hospital in town. Even in Grand Junction, Michael Pramenko told me, “some of the doctors are beginning to complain about ‘leaving money on the table.’ ”

Wednesday, July 9, 2008

Are US doctors paid too much?


http://www.startribune.com/politics/national/congress/22708684.html?location_refer=Opinion

Recently there has been some squabbling over budget cuts to Medicare/Medicaid and state-sponsored health care that may cause doctors to decline services to those patients, because they won't be "properly compensated" by the government. So the doctors are revolting, and Bush has threatened to veto any cuts proposed by Congress. Right now they're debating a 10% cut, actually as part of a mechanism that was previously approved in the event that costs exceed certain markers, which is happening now in a big way. The pay cut survived the House, but will probably stall in the Senate and will definitely be killed at the Oval Office.

I know doctors are businessmen/women too, and they have a bottom line to maintain. They are skilled professionals who went through rigorous training ($30,000/year tuition + living expenses), and deserve compensation for their critical contributions to society. But I don't know how they can morally refuse to treat needy people dependent on government health care, just because they'll be reimbursed $2,700 for an arthroscopic knee surgery instead of the "going rate" of $3,000. Are they pinching pennies that much, even with a $200,000 salary? The cars they drive surely don't suggest it.

And what other industry but health care can the providers dictate costs and the consumers just have to accept it? Equally greedy HMOs and others might try to negotiate a "fairer" price, but in the end the doctors bill Medicare as they like, and our tax dollars go up in smoke (in many cases, overcharging Uncle Sam). In other markets like automobiles and air travel, competitors are cutting prices left and right in order to secure customers. But can we "shop around" for doctors who can provide the best service at the most reasonable cost? We just go where our insurance tells us to go, and actually most of the process is a black box to us. I guess most of us just feel lucky that we weren't refused care!

There was an interesting NYT article last year (below) discussing whether US doctors are paid too much, and whether they have more impact on the insanely high costs of health care than even prescription drugs. Pharmaceuticals are 30-50% more expensive in the US vs. Europe, but doctors' salaries are sometimes 100% more. A typical UK doctor in 2002 made $60-120,000 and lives well, if you've seen Michael Moore's "Sicko". But US specialists make $300-400,000, and we all know the young doctors graduating from school all want to be specialists. But how many radiologists and anesthesiologists do we need, versus the pediatricians and GPs who deal with normal patient problems and practice normal medicine "in the trenches" (ironically the lowest-paid doctors)? Relatively few new doctors are going into those "unglamorous" fields versus the huge demand, so no wonder we have to import them from other nations - yet some patients complain about foreign accents and demand an "American" doctor. Well, blame the American medical system and its students then, who would rather be Nip/Tuck than Patch Adams!

Because the fees they charge are so high (and patients have no choice but to pay), doctors also have a financial incentive to over-prescribe treatment in order to make more money. I am sure we can Google many examples of this to back up the NYT's claim, as well as cases of defrauding Medicare/Medicaid. And unlike Europe, Medicare lacks the resources (and/or motivation) to scrutinize a doctor's treatment request, veto if unnecessary, or maybe suggest a cheaper alternative. Doctors in other developed nations are more-or-less paid flat salaries from their national health systems, with performance-based incentives. Their doctors are paid less, yet deliver better services on average, based on WHO rankings and other studies. In fact, socialized medicine nations like the UK, Canada, and Australia outperformed the US in terms of medical errors and patient satisfaction (http://www.medpagetoday.com/PublicHealthPolicy/HealthPolicy/tb/2074). So maybe there is a real problem with the "quantity over quality" approach by many US doctors.

From NYT:

"Almost all expenditures pass through the pen of a doctor," he said. So a doctor may decide to perform a test that costs a total of $4,000 in order to make $800 for himself — when a cheaper test might work equally well. "This is a highly inefficient way to pay doctors," Dr. Bach said.

Medicare, especially, does not like to second-guess doctors' clinical decisions, said Dr. Stephen Zuckerman, a health economist at the Urban Institute. "There's not a lot of utilization review or prior authorization in Medicare," he said. "If you're doing the work, you can expect to get paid."

As a result, doctors have steadily increased the number of procedures they perform on Medicare beneficiaries — and thus have increased their income from Medicare, Dr. Zuckerman said. But the extra procedures have not helped patients' health much, he said. "I don't think there's any real strong evidence of improvements in health status."

Private insurers like H.M.O.'s are more aggressive than Medicare in second-guessing physicians' clinical decisions, and they will refuse to pay for imaging scans or other expensive new procedures. Now Medicare and private insurers are moving cautiously to change the current system. Recently, they have proposed pay-for-performance measures that would give doctors small bonuses if their care meets the standards set by national medical organizations such as the American Heart Association.

BUT all those measures are a minor fix, said Dr. Alan Garber, a practicing internist and the director of the Center for Health Policy at Stanford University. Instead, he argues, the United States should move toward paying doctors fixed salaries, plus bonuses based on the health of the patients they care for.

Even in the existing system, some health insurers, notably Kaiser Permanente, already have large networks of salaried doctors. But it would require doctors to give up some of their autonomy and move into larger group practices or work directly for insurers, a step they have been reluctant to take. About 40 percent of doctors are in single or two-physician practices, Dr. Garber said.

Nor is the American Medical Association, which represents doctors, eager for wholesale changes in the system, said Dr. Edward L. Langston, chairman of the A.M.A. board.

But Dr. Goldman of RAND said that doctors are misleading themselves if they think the current system serves patients' needs. For example, if a diabetic patient visits a doctor, he said, "the doctor is paid to check his feet, they're paid to check his eyes; they're not paid to make sure he goes out and exercises and really, that may be the most important thing."

"The whole health-care system is set up to pay for services that are rendered," he said, "when the patient, and society, is interested in health."


Oh yeah, and I forgot to mention that doctors are often paid the same from insurance/Uncle Sam whether they perform a procedure brilliantly or totally botch it. Some legislation was proposed to only pay doctors in full upon successful completion of the procedure, but of course the physician's lobby fought it and watered it down. Now the government doesn't have to pay doctors for a few specific errors, like if surgical instruments are left in patients, catheters are improperly implanted, and won't cover the costs of preventable hospital-acquired infections. Doctors warned that such rules would cause legal nightmares and actually reduce overall care, as patients would have to disclose their entire medical histories before doctors would agree to treat them, so various post-op complications wouldn't be blamed on them. And then doctors might even refuse to treat the most at-risk patients to avert potential consequences. Well, I guess we shouldn't revere doctors as selfless heroes. They look after #1 just like the rest of us.

http://www.washingtontimes.com/news/2007/aug/28/medicare-and-medical-mistakes/
http://www.bcbs.com/news/national/medicare-won-t-pay-for-hospital-mistakes.html

So if our presidential candidates do seriously want to overhaul and improve the US health system, trimming doctors' salaries may be a politically daunting but absolutely necessary component of the solution.

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http://www.nytimes.com/2007/07/29/weekinreview/29berenson.html?_r=1&oref=slogin


The Nation
Sending Back the Doctor's Bill


By ALEX BERENSON
Published: July 29, 2007