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Escaping The Rat Race: How Physician Reimbursement Scarcity Increases Costs And Promotes Fraud

Animal research has shown that the best way to get a rat to press a pellet-producing lever is to set the mechanism so that it doesn’t always release a pellet with each push. The unpredictability (or scarcity) of the reward causes the rat to seek it with more fervor. Casino owners are well aware of this phenomenon, gaming our brain’s natural wiring so that our occasional wins drive us to lose more than we would if our winning had a predictable pattern.

I believe that the same principle is at work in physician reimbursement. Although most patients don’t realize this, physicians aren’t always paid for the work they do, and they are paid wildly different rates depending on how they code an encounter or procedure. After several health insurance denials of payment for legitimate work, physicians look for ways to offset their losses. Those may include changing the coding of their procedures to enhance the rate of reimbursement, exaggerating the complexity of an encounter, or (less commonly) billing for things they didn’t do. Because of the perceived injustice in a system that randomly denies payment for legitimate work, the physician feels less morally concerned about her over billing and coding foibles.

And so a vicious cycle of reimbursement deprivation, followed by fraud and abuse, becomes the norm in the U.S. healthcare system. Payers say that physicians are greedy and unethical, and physicians say that payers deny reimbursement unfairly and pay rates that are too low to be sustainable. The government’s response is to hire a cadre of auditors to ferret out physician fraud while cutting reimbursement to physicians further. This is similar to reducing the rate of pellet release to the rats in the Skinner boxes, while randomly electrocuting them through the metal flooring. The result will be that rats will work harder to find work-arounds to get their pellets, including gathering together into larger groups to share pellets. This is occurring more and more commonly as solo practitioners are joining hospitals or large group practices to make ends meet.

But we need to realize a few things about the “Skinner box healthcare system:”

1. Rats are not evil because they press levers manically when there is a scarcity of pellets. Physicians are not evil when they look for ways to make up lost revenue. While fraud and abuse are always wrong, it is not surprising that they are flourishing in an environment of decreasing reimbursement and increasing health insurance payment denials. If we want to address fraud and abuse, we need to understand why it’s happening so that our “solutions” (i.e. hiring thousands more government auditors to investigate medical practices) don’t end up being as useless as shocking the rats.

2. Health insurance (whether public or private) is not evil for trying to rein in costs. Payers are in the unenviable position of having to say “no” to certain expenditures, especially if they are of marginal benefit. With rats pressing levers at faster and faster rates for smaller and smaller pellets, all manner of cost containment mechanisms are being applied. Unfortunately they are instituted randomly and in covert manners (such as coding tricks and bureaucratic red tape) which makes the rats all the more manic. Not to mention that expensive technology is advancing at a dizzying rate, and direct-to-consumer advertising drives demand for the latest and greatest robot procedure or biotech drug. Costs are skyrocketing for a number of good and bad reasons.

3. There is a way out of the Skinner box for those primary care physicians brave enough to venture out. Insurance-free practices instantly remove one’s dietary reliance on pellets, therefore eliminating the whole lever pressing game. I joined such a practice several years ago. As I have argued many times before, buying health insurance for primary care needs is like buying car insurance for your windshield wipers. It’s overkill. Paying cash for your primary care allows you to save money on monthly insurance premiums (high deductible plans cost much less per month) and frees up your physician to care for you anywhere, anytime. There is no need to go to the doctor’s office just so that they can justify billing your insurance. Pay them for their time instead (whether by phone, in-person, or at your home/place of business) and you’ll be amazed at the convenience and efficiency derived from cutting out the middle men!

Conclusion: The solution to primary care woes is to think outside the box. Patient demand is the only limiting factor in the growth of the direct-pay market. Patients need to realize that they are not limited to seeing “only the physicians on their health insurance list” – there is another world out there where doctors make house calls, solve your problems on the phone, and can take care of you via Skype anywhere in the world. Patients have the power to set physicians free from their crazy pellet-oriented existence by paying cash for their health basics while purchasing a less expensive health insurance plan to cover catastrophic events. Saving primary care physicians from dependency on the insurance model is the surest path to quality, affordable healthcare for the majority of Americans. Will you join the movement?

Do We Really Need Another Branch Of Government To Enforce Medical Informed Consent?

Health Leaders Media recently published an article about “the latest idea in healthcare: the informed shared medical decision.”  While this “latest idea” is actually as old as the Hippocratic Oath, the notion that we need to create an extra layer of bureaucracy to enforce it is even more ridiculous. The author argues that physicians and surgeons are recommending too many procedures for their patients, without offering them full disclosure about their non-procedural options. This trend can be easily solved, she says, by blocking patient access to surgical consultants:

“The surgeon isn’t part of the process. Instead, patients would learn from experts—perhaps hired by the health system or the payers—whether they meet indications for the procedure or whether there are feasible alternatives.”

So surgeons familiar with the nuances of an individual’s case, and who perform the procedure themselves, are not to be consulted during the risk/benefit analysis phase of a “shared” decision. Instead, the “real experts” – people hired by insurance companies or the government – should provide information to the patient.

I understand that surgeons and interventionalists have potential financial incentives to perform procedures, but in my experience the fear of complications, poor outcomes, or patient harm is enough to prevent most doctors from performing unnecessary invasive therapies. Not to mention that many of us actually want to do the right thing, and have more than enough patients who clearly qualify for procedures than to try to pressure those who don’t need them into having them done.

And if you think that “experts hired by a health insurance company or government agency” will be more objective in their recommendations, then you’re seriously out of touch. Incentives to block and deny treatments for enhanced profit margins – or to curtail government spending – are stronger than a surgeons’ need to line her pockets. When you take the human element out of shared decision-making, then you lose accountability – people become numbers, and procedures are a cost center. Patients should have the right to look their provider in the eye and receive an explanation as to what their options are, and the risks and benefits of each choice.

I believe in a ground up, not a top down, approach to reducing unnecessary testing and treatment. Physicians and their professional organizations should be actively involved in promoting evidence-based practices that benefit patients and engage them in informed decision making. Such organizations already exist, and I’d like to see their role expand.

The last thing we need is another bureaucratic layer inserted in the physician-patient relationship. Let’s hold each other accountable for doing the right thing, and let the insurance company and government “experts” take on more meaningful jobs in clinical care giving.

The Cost Of Health Care, BioMed Jobs, And Other Health News

health care costs, Rob Stein, NPR, reporting on health, medical ethicsHealth Costs: In an unusual stance, a leading doctor’s group has issued ethical guidelines that include taking cost into account when recommending medical treatments for patients, Rob Stein reports for NPR’s Shots blog.

BioMed Jobs: A Texas biomedical research center that was supposed to create 5,000 jobs with a $50 million state grant has fallen far short of those goals, and the private company that received 70 percent of the money has pulled out of the project, Matthew Watkins reports for The Eagle.

Health Reform: What’s happening in health reform this year? Sarah Kliff of the Washington Post lays out some key dates for 2012.

Medicare: Read more »

*This blog post was originally published at Reporting on Health - The Reporting on Health Daily Briefing*

California Hospital Investigated For Unusually High Number Of Kwashiorkor Diagnoses

Kwashiorkor in Niger

Is it plausible that one small hospital in rural Northern California treated 1,030 cases of Kwashiorkor within a two year period?

Before you answer that, let me explain what Kwashiorkor is.  It is a severe form of protein malnutrition…starving to death actually.  It is the type of starvation you see in African children.  It is so severe that the patient needs special nutritional support including special re-feeding with vitamins and it occurs mainly in children ages 1-4.   Adults can starve to death, but they do not develop classic Kwashiorkor.

Medicare pays hospitals a flat rate based on diagnosis codes for patients.  Patients with more severe coded illnesses get paid at a much higher rate.  Shasta Regional Medical Center, located in Redding, Shasta County, California is under the microscope for billing Medicare (our tax dollars at work) for 1,030 cases of Kwashiorkor to the tune of $11,463 for each diagnosis.  This medical center is Read more »

*This blog post was originally published at EverythingHealth*

Little Evidence For ER Wait Time Marketing Claims And Other Health News

ER Waits: Hospitals’ marketing claims of short waits for emergency room care aren’t backed up by any evidence, John Dorschner reports for the Miami Herald.

Chronic Fatigue: The editors of prestigious journal Science have retracted a controversial paper linking chronic fatigue syndrome to the XMRV virus; critics of the study believe contamination of samples was to blame for the results, which have not been replicated by other scientists, Ivan Oransky reports for Reuters.

Environmental Health: Tough new EPA rules on mercury emissions from oil- and coal-burning power plants are being Read more »

*This blog post was originally published at Reporting on Health - The Reporting on Health Daily Briefing*

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