Physician Self Referral (and my weekend plans)

Physician self-referral is in the news today (and yesterday). This is a good sign - we are talking about real concerns!

Today, the Washington Post points out that orthopedists who bring MRI and CT scans into their offices do far more tests. Yesterday, the New York Times noted that the McAllen Texas physician-owned hospital has given gobs of money to Democrats across the country. (Prohibitions on physician ownership of hospitals and ambulatory facilities are being watered down in the heath care reform legislation – and it’s easy to see a connection). This is the hospital in the Texas town that Atul Gawande has made famous in a New Yorker article examining the cause of high cost care there. His conclusion was self-referral.

There is excellent evidence that physician ownership of ancillary facilities increases utilization of these facilities by a factor of between 2 and 9. (Proximity of ancillary facilities alone also increases utilization, even absent physician ownership).

Potential solutions:

1. Decrease the fee for service payment for services that involve self-referral, so that these are no longer high-margin . This is tough to maintain – since technology generally lowers the cost of ancillary services, and it’s hard to keep on lowering prices in real time

2. Heavy duty regulation – like the Stark Laws that prohibit physician referral to services in which they have ownership interest. As a practical matter, these regulations have ended up having meaningful loopholes which have decreased their effectiveness. Removing all loopholes might restrict access in rural areas or decrease innovation.

3. Bundle payments – to make providers feel accountable for the resources used in caring for the whole patients. This also encourages consolidation of physicians – perhaps into accountable care organizations – which could be very promising.

Personal note:

I’m going to stop thinking about managing health care costs over this weekend, and I’m doing a two-day charity bike ride to raise money for cancer research. If you’re interested in learning more about this, go to www.pmc.org/profile/jl0070. I’m also going to tweet on Twitter during the rest stops over this ride – if you’d like to tune in, go to www.twitter.com/jeffnlinda.

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Block That Metaphor – and Marbled Fat

Yesterday on Fresh Air Maggie Mahar told Terri Gross of NPR that there was 30% waste in the health care system. She went on to say that the waste was not just “fat hanging out of the sides of the meat…. It is marbled in, so we’ll need a scalpel” to remove the waste.

I don’t know any carnivorous surgeons who can use a scalpel to carve out marbled fat. While at first I thought the metaphor was awful – perhaps it’s very apt. Cutting out some waste might appear easy – but since waste is always someone’s income, removing it might be akin to removing the marbled fat in a steak.

Speaking of marbled fat- Health Affairs had a timely web release yesterday pointing out the cost of obesity n the American health care budget. This article assigned $147 billion to excess costs from obesity in 2006 – and pointed out that obese people cost 13% more than matched nonobese people in the working population under 65 (with private insurance).

This number will be quoted a lot – and it should be. We pay a huge societal price for being sedentary and eating too many calories. Individuals with high BMIs(body mass index) pay a high personal price, too.

Let’s remember, though, that identifying obesity as a cause of excess costs is not equivalent to solving the health care cost crisis. In the medical world, there aren’t many wildly successful approaches to weight loss aside from bariatric surgery – which is serious enough that it is restricted to those with morbid (severe) obesity. There are things we can do outside of the medical world – like building bike lanes and walkable cities, opening up the stairway doors and discouraging elevator use, and putting calorie counts on menus. None of these has been definitely proven to cause weight loss – but at least all of these public-health oriented measures are inexpensive. They are also a great example of “choice architecture,” making it easy for people to make more personally and socially beneficial choices.

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Reframing the Debate, and A Personal Example

"If somebody told you that there is a plan out there that is guaranteed to double your health-care costs over the next 10 years, that's guaranteed to result in more Americans losing their health care, and that is by far the biggest contributor to our federal deficit, I think most people would be opposed to that...That's what we have right now, so if we don't change, we can't expect a different result."

Barack Obama tried to reframe the debate last night. We’ve been stuck in a “Nash Equilibrium,” where (virtually) no one is overwhelmingly happy with the current system, but few are confident that a huge change will be personally beneficial. Therefore, it’s hard to make any progress toward change. Obama’s statement is supposed to help underline how unacceptable the current situation will become in subsequent years. This makes us compare health care reform with a dire future, rather than the present, which is pretty acceptable to most insured Americans and very acceptable to constituents within the health care system.

On another note, I’ve been impressed that the New York Times has fielded thoughtful and insightful reporters on health care in recent years. One of my favorite reporters is Gina Kolata, who wrote an excellent book on the 1918 influenza epidemic in 2000. Kolata has a memoir piece in today’s paper explaining why she chose to receive utterly unproven therapy for her running injury. Making even savvy patients into prudent consumers isn’t easy.

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