More on "money-driven medicine"
Dallas sees no relief in health care expenses as competition drives up costs
September 20, 2009, The Dallas Morning News
Medical care in Dallas is delivered in a broken market where doctors, hospitals and other providers shower patients with services of diminishing value but staggering cost.
The spending is rooted in the city's proud entrepreneurial culture. Dallas is home to many competing hospital systems and physician practices. But this competition raises costs rather than lowering them, because it rewards those who do more procedures and tests and offers no incentive to spend less.
Scott & White Healthcare in Temple, by contrast, dominates medical delivery in Central Texas yet provides care for far less money. "Logically, the more competition, the lower the price. It doesn't work that way in health care," said Scott & White president and CEO Alfred Knight. "Competition increases the price."....
Also see:
A New Way to Pay Physicians
By Anne Underwood
September 23, 2009, New York Times Prescriptions BlogDr. John C. Lewin, chief executive of the American College of Cardiology, has met with administration officials and members of Congress about ways to revise pay incentives for doctors. He spoke with a blog contributor, Anne Underwood.
Q.What's wrong with the way physicians' pay is structured now?
A.We have built our system on a payment model that rewards volume. Doctors get rewarded for more tests, more volume, more hospital admissions, more visits. There are no incentives for quality of care or administrative efficiency. That's part of why our system is more expensive than other nations.
The good news -- and the reason why I'm excited about health care reform -- is that the best health care in this country often tends to be very affordable. The whole discussion about bending the cost curve can be resolved by setting new incentives in payment that reward better outcomes with evidence-based medicine....
I plan to use this thread to post any new pieces I see on topic in comments
For those that still haven't read it, here's a link to Atul Gawande's The Cost Conundrum:
What a Texas town can teach us about health care, for the June 1 New Yorker. And for those who don't know it, here's a link Healthbeatblog.org by Maggie Mahar, author of the 2006 book Money Driven Medicine: The Real Reason Health Care Costs So Much.
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I especially enjoyed this passage from the New Yorker piece:
'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.'
In medicine, there's an expression like 'think horses, not zebras.' I.e., it's more likely that an illness is a common, not exotic, one, and making a common diagnosis is faster, cheaper, and requires a touch of judgment. But the problem is twofold:
1) Work ethic. It unquestionably takes more work to find a zebra than a horse. Therefore, in our all-pervading ethos, it is BETTER, not just financially, but spiritually, too, to find the rare object, or at least to try.
2) Medicine is inherently probabilistic. The temptation is to get to that '1 percent doctrine'- eliminate all possible threats to a patient. Well, yes. But we are not a culture that is comfortable with probabilistic phenomena. IMHO. The 'free market' model is one in which, presumably, the probabilities cancel out in the right way, rewarding the most deserving operations. This is a deeply held myth. As a result, we don't have a rational apprasial of the markets we think we understand so well.
September 25, 2009 3:22 PM | Reply | Permalink
I enjoyed reading your sophisticated thoughts on the matter.
I just can't get away from a simplistic view of it all, though, it just screams at me because of the kind of work I do and, I guess how I think: the profit motive has no business in the practice of medicine. It's a profession (one with an oath, yet.) We look down on ambulance chasing lawyers working on contingency fees, call them shysters, for a reason.
Neither is there a "fair market" involved as classically defined-- "willing buyer, willing seller...neither being under any compulsion to buy or sell and both having knowledge of all relevant facts"--because if you don't have your health, they've got you, you are under compulsion to buy recklessly, and you don't have the knowledge they do, to say the least.
That's not in any way to argue that there is no role for entrepreneurship. On the contrary, I think it's helpful for scientific advances in medicine, and don't agree with those who pooh-pooh the profit incentive there, trying to argue that non-profit funding does just as well. There's a immportant place for BOTH in research and development, they temper one another (the non-profit R & D is far too weak in our system, they need to have equal emphasis.)
It's just that the actual practitioners should be professionals, always striving to remove all conflict of interest. If you're an opthalmologist, you can invest in all the artificial heart machines you want as far as I am concerned.
September 26, 2009 12:53 AM | Reply | Permalink
Most of us are satisfied with -- indeed, fond of -- our personal care physician.
How, politically, do we go about separating the subset of specialists and "physician-investors" from the PCPs and wail on the former?
September 25, 2009 4:58 PM | Reply | Permalink
Oops! Primary care physician.
September 25, 2009 5:00 PM | Reply | Permalink
Your "personal" care physician will soon be replaced by an identical clone of Barack Obama, except the clone is a doctor.
Since your faith in free-market economics is symptomatic of a large cerebral tumor, Dr. Obama schedules an operation, but then you lie around the OR month after month, surrounded gawkers and peeping toms.
Eventually one of them offers you an aspirin, and explains that Dr. Obama has rescheduled your operation for December 25, 2015, in Okinawa.
Merry Christmas!
September 25, 2009 10:52 PM | Reply | Permalink
Funny . . .
I've never had an inkling to date Dr. Yamada, but his choice of sushi joints is superb. And what I truly like the most about him after some 18 years is that he listens to what I say my needs are and takes care of those needs. This may sound cold and calculated but he's not my friend, he's my employee.
~OGD~
September 25, 2009 11:51 PM | Reply | Permalink
All I have is my sense from my reading, and from personal experience, and from anecdotal evidence of family and friends (not to mention tons of personal internet stories whenever I have researched a medical problem...)
And from that I believe that people who have good primary care are not the crux of this problem.
I know you like facts and figures, Ellen, but I don't have them, all I have is these rambling thoughts:
It's those who are outside of "managed" care that drive the problem. First there's those who are able to consume without direction of primary care, those who have fee for service coverage, or pay out of pocket, or have HSA's, etc.
But I suspect what is of greater cost import is something mentioned in the Dallas article, which I have personally experienced with family (in the upper Midwest, not in Texas,) actually know very well that way. See my bold:
Once you get into critical care, where there are huge costs, the primary care physician is treated like persona non grata. The big heart surgeon shoves him out of the way and takes over. They don't want to know from him/her. If they are the stars of the hospital, and draw a lot of publicity, donors and paying patients, you'd be surprised what they can get from the most tightwad insurance company. But they are far too busy important people to like, pay attention to that festering bed sore, that's for somebody else to do. Doctors flow in and out of the room, only paying attention to the body part that is their business.
It is a long standing culture in our medical community to look down on primary care doctors as the lowest on the totem pole. That was encouraged long ago by the Medicare board that sets payment rates, putting specialists far higher, and the whole style of payment per service. (When some HMO's started doing capitation back in the day, that added to the problem.)
Another point: everyone seems to get it about big pharma and advertising to the consumer as a nasty, distorting racket. That is one that primary care doctors do participate in to a degree. Some are just influenced by the hot drug or treatment of the moment, (i.e., everyone gets put on Lipitor, just like their forebears yanked all the kids tonsils,) some have a hard time saying no to patients highly affected by advertising, many just don't have time to explain "no," and some fall for drug co. sales tactics.)
But I don't think most people realize how much this type of thing goes way beyond pharma. There are tons of other industries out there selling stuff, motorized chairs, stents, ostomy supplies, TMJ devices, diabetic supplies to your door....
There's even a new kind of hospital designation created by Congress, LTAC hospitals. If you want to see an example of an industry that seems to have been created just to get Medicare dollars when Medicare wouldn't pay for nursing homes, check that out (Kindred Corp. and Select Medical Corp. are two big ones.) They are often hospitals run inside hospitals, just created to get people out of ICU's but still someplace covered. Now LTAC's have their own salaried primary care givers, you go in one of those from the main hospital and you have a whole new medical team different from the one you had before....
I do believe the problem is that we don't have enough primary care physicians that have enough time to spend with each patient and that they don't have enough power or prestige in the system. And it's a vicious circle, fewer and fewer med students wanted to go into it because of both money and prestige.
To go back to non-critcal care, the wholistic approach to medicine has proven itself time after time after time. But a lot of people outside of the care of a primary physician don't get it. They go to specialists and get uncoordinated care, many times to their detriment. Go visit any bulletin board on the net on tinnitus or GERD and you'll see how many people have spent a lot of money bouncing around to neurologists and gastro-enterologists with their problem, paying for all kinds of fancy tests and drugs and treatments, and have come out of it with more problems than when they started. And then you find those few who finally find a physician who takes their whole history and works them back to a state of health, first by subtracting all the damage from the treatments, then finding the systemic problem, based not on treating a body part but the whole person. Cheaper, all it requires is paying a good physician for his time and thought.
September 26, 2009 1:39 AM | Reply | Permalink
Texas has 67 of the country's 226 physician owned hospitals. The benefit of these specialty hospitals is that they focus on a set group of diseases like cardiology or orthopedics. Trying to determine if they actually save money is difficult but Texas, especially Dallas, would be a good place to look at the data
http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/092109dnprodoctor_owned.414c311.html
One-fifth of Baylor's revenue comes from physician owned hospitals in it's system.
September 25, 2009 7:25 PM | Reply | Permalink
Thanks.
September 26, 2009 1:42 AM | Reply | Permalink
Ellen asks the right question, which is what political approach is useful?
I like to emphasize that the US surely has the world's richest physicians, of not the world's beat health care system. But we need the doctors on board, and many are, just not the entrepreneurial AMA, (which was formerly in favor of Truman's national system, as I understand it). Perhaps we can avoid an onslaught of well-funded AMA resistance if we offer incentives for salary-based doctoring, like a sunset-limited lower income tax rate for them, while the business guys get to keep their clinics.
What we want is for hospitals and clinics to attract salary-based docs interested in working in teams, as the Mayo example has proven. If we find it useful to offer tax holidays to businesses for start-up incentives perhaps we could do the same for health care.
To get the patients on board we should emphasize the empowering possibility of portable coverage, which allows employees to consider walking away from lousy jobs. Right now most of us, while we like our docs, are hostage to the coverage provider, our employer.
And for everyone with coverage, Dems should buy TV air time and run "Sicko".
September 26, 2009 8:35 AM | Reply | Permalink
Art Appraisor--
You write: 'Scott & White Healthcare in Temple, by contrast, dominates medical delivery in Central Texas yet provides care for far less money. "Logically, the more competition, the lower the price. It doesn't work that way in health care," said 'cott & White president and CEO Alfred Knight. "Competition increases the price.'....
That's exactly right--and helps explain why healthcare is so expensive in cities like Manhattan, L.A. Boston etc. where there are so many competiting hosptials.
In other, non-healthcare markets more competition brings prices down as rivals advertise their lower prices.
If a hosptial advertised: "we do heart surgery for less" this would frighten people.
What does this mean? Who are these doctors?
80% of our heatlhcare dollars are spent when we are seriously ill, and people who are that ill are not hunting for a bargain.
Secondly, the way hospitals compete is by vying for the most prestigious doctors who will then sen their well-heeled, well-insured patients to to
the hopsital.
On physician owned clnics and hospitals-- there is much evidence that they over-treat patients.
The conflict of interest is obvious. . .
We need more legislation banning docs from having a financial interest in a clinic, hospital, or testing center where they might send patients.
How do you attract the "top" doctors? By having the most expensive newest equipment--even if the hospital two blocks away also has it in its outpatient clinic. Doctors lounges paneled in mahogany also are popular--as is private parking for doctors etc. etc. etc.
How do you pay for all of the redundant diagnostic equipment? By using it--even if the patient doesn't really need the test.
All of those unncessary tests are then built into the cost of hospital care.
Tom-- Dems also might get together and buy air time for the film "Money-Driven Medicine." (Alex Gibney, who made "Enron: The Smartest Gusy in the the Room" and "Taxi to the Dark Side" has made
a 90 minute documentary of my book. (I have no
financial interestt in the film.)
Because Gibney produced it, the film is excellent-- high production values, riveting stories.
DVD's are now available, and screenings are taking place in various cities. You can find out more about the film at www.moneydrivenmedicine.org At some point in the near future, a streaming video of the film will be available, at on cost, online for two weeks.
Check the website
September 26, 2009 1:29 PM | Reply | Permalink
Not good news:
If this is a trend, and any reform bill enacted does not address it sufficiently, it's real bad. Lots of smart reformers use them as a gold standard, and if they give up on staying in Medicare, it will help label our biggest "public plan" as a penny wise and pound foolish failure.
October 12, 2009 6:16 PM | Reply | Permalink
November 10, 2009 1:10 AM | Reply | Permalink
Nice catalog of the issues AA. Sorry I missed this post on the initial go-around.
November 12, 2009 10:28 AM | Reply | Permalink