Medical Economics

     All the talk about the overall cost of medicine is really Macroeconomics. But man is an economic animal, or so the capitalists believe, so an individual doctor's behavior must be considered from a Microeconomic point of view. Of course, in addition to making money, a doctor practices altruism, works for the good of his individual patient (which does not necessarily correspond to the good of society), spends a lot of uncompensated time (ever try arguing with an insurance company about drug coverage?), values the respect of his peers, values himself as an ethical professional, and wants to avoid being sued for malpractice (which is not the same as practicing responsible medicine---see my previous blog on how doctors can avoid malpractice suits). Then we have the insurance company and government interference when both groups say they will only pay for "indicated and necessary" tests and procedures, and then ,make doctors jump through all sorts of hoops to justify the tests and procedures (which again may not benefit the patient), but which they think will save money. Rather than writing a discursive article, I will just list the many circumstances, events, and laws, some of which are based on flawed and/;or unproven assumptions, that circumscribe the actions of doctors. Some of it may be unbelievable, but I can assure you it is all true, as even a cursory search of the internet will show.

1) Medicare (henceforth MCR) decreed that in order to save money, if a dermatologist biopsied two lesions at the same visit, he would be paid less for the second biopsy, since the patient was there already. Dermatologists immediately started telling their patients to come back in two weeks for the second biopsy, so they could collect a full fee for the second biopsy.

2) I used to have four to six of my patients in a nursing home at any one time, following them there after hospital discharge, until they were well enough to go home. I would see these patients every week, two weeks, or four weeks, as I thought the medical situation warranted. (And the state requires that the admitting doctor see each nursing home patient at least once in every 30 day period, which is very reasonable.) If I saw three patients in a nursing home the same day, then MCR paid me less for the second and third patient, saying that I was already there to see the first. Strangely enough they do not apply this payment process when I have three patients in the hospital and see them all the same day. So I have to make six visits to the nursing home in one month to see my six patients which is a grossly inefficient use of my time. Then if I see a patient more often than once every 30 days, if I do not have them sign a statement saying that they acknowledge that MCR might  not pay for a doctor's visit more than once every 30 days, then I can't bill the patient or MCR. I finally stopped seeing any nursing home patients. They were not medically abandoned, since by law every nursing home must have an attached doctor who will admit and follow medically any patient who does not have a personal admitting doctor.

3) An orthopedic surgeon is paid a fee for surgery that includes all the follow-up visits and care in the hospital. He does NOT get paid extra money for a patient's extra days in the hospital. MCR rules were that a patient could go home when he/she could walk 100 feet unaided. Now 65 year old Mr. Jones was much stronger than 95 year old Mrs. Smith, and recovered faster. So the surgeon would send Mr. Jones home at the 100 foot mark, but would tell the physical therapist not to record Mrs. Smith's walking 100 unaided feet until two weeks after the surgery.

4) NY State started keeping a report card of the patient death rates of hospitals and individual cardiac surgeons. The immediate result is that cardiac surgeons stopped doing difficult cardiac cases where the estimated mortality was greater than 20%. As a result fewer open heart procedures were done in NYC teaching hospitals than were done before the report cards were issued.

5) The most competitive residency is dermatology, because of the enormous amount of elective plastic surgery that they do, such as Botox and Restalen injections. In NYC, one Botox injection costs the patient about $500, and has to be repeated every 3 months. Doctors can charge whatever the traffic will bear: since neither MCR nor insurance companies pay for the procedure, their fees are uncapped.

6) All doctors memorize the diagnosis codes necessary so MCR will pay for a blood test that is "indicated" for the diagnosed condition. If a patient looks pale and has orthostatic drops in blood pressure as well as a rapid pulse,
there is no computer code for "in my experience, this patient is anemic". But if I ask him if he/she has ever been tired in the past 20 years, and I get a "yes" answer, then the code 780.79 (fatigue) will let MCR pay for the blood count (CBC). We do this all the time, since there is no fuzzy logic in computer diagnoses, any more than I can say "this patient looks sick and needs hospital admission".

In the same vein, hyperthyroidism is one of the treatable causes of high blood pressure. Until a few years ago, a diagnosis of 401.9, hypertension, was a justifiable diagnosis for MCR to pay for a thyroid test. Then they stopped allowing this diagnosis. Thank God at every autopsy every patient has at least one minute thyroid nodule, so we can put down "goiter" as a diagnosis in order to measure the thyroid hormone of a newly hypertensive patient without breaking the law.

7) All hospitals are paid for an admission by DRG's, or Diagnosis Related Groups. That is if I admit a 65 year old male insulin-dependent diabetic with an anterior wall heart attack, then the insurance company or MCR  will pay for X days of hospital treatment. If the patient is sent home before X days, the hospital makes extra money on the admission. If the patient stays longer than X days, then the hospital loses money. The hospital puts pressure on the ward attendings who pressure the residents who pressure the interns into discharging their patients home as rapidly as possible. Every patient has a "problem list",or a list of his/her medical problems in descending order of importance: (1) heart attack, (2) insulin-dependent diabetes, (3) non-suicidal depression secondary to #1, etc. Now the common saying is: "Problem #1---discharge plans".

8) As an aside, there is a perfectly good reason why doctors are not supposed to treat their families: insufficient emotional distance, and a chance of making a medical decision for partly non-medical reasons. But now all the states require family members to decide when to "pull the plug" on a family member, a decision they are neither emotionally equipped to do nor have any emotional distance from. So according to the state, it is right and proper for a person to end the life of a family member, but not proper for a doctor to write a prescription for a family member. And let's not forget that the doctor probably knows his/her patients true feelings about death and life better than does the family, We all have families in our practice  where the spouse is not given this decision-making power because the children are trusted to make the patient;s wishes come true, and not the spouse.

9) Until recently, MCR said that a patient needed two units of blood or no transfusion at all, and sanctioned doctors who gave only one unit. Guess what the doctors started doing with all their MCR patients if they felt they needed a transfusion of one unit of blood?

10) Medicare is going to reward doctors who prescribe electronically and financially penalize doctors who do not, without any pilot study showing that electronic prescribing either saves money or is safer for the patient. The same Johns Hopkins pediatric hospital that showed the numerous errors resulting from in-hospital written orders instituted an electronic ordering system. A follow-up 2-year study showed no decrease (and a statistically insignificant increase) in medication errors.

11) Finally MCR pays non-linearly. A lawyer or plumber charges a fixed amount per hour, broken down into 10 minute segments or whatever. But MCR will pay me much more to see 2 patients in 20 minutes than 1 patient in 20 minutes, even if the single patient gets better care and a more precise diagnosis from the extra 10 minutes of my . So if a doctor wants to make more money, he will see one patient every 10 minutes and order a test and tell the patient to come back, rather than one every 20 minutes. And let's not forget that psychiatrists get paid 2/3 of what an internist gets paid for the same amount of time, probably because the government feels that if you are a little crazy it won't kill you!