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Much has been made of Atul Gawande’s New Yorker article investigating the root causes of high healthcare costs in McAllen Texas. President Obama made the Gawande article required reading for White House staff. In the blogging community, some of my favorite commentary has come from our own Eric Widera here, the Buckeye Surgeon here (with a response from Atul Gawande here), Wachter’s world here, and the Director of the Office of Management and Budget Peter Orzag (!) on his white house blog here. I developed the idea for this post as a comment on KevinMD’s site here(second highest rated health blog on wikio; see the lively discussion in the comments). Atul Gawande delivered a follow up to his article as a commencement speech to the University of Chicago Medical School, here.

The fine research from Dartmouth cataloging the dramatic variation in Medicare Expenditures has been well publicized for some time. High cost areas do not deliver higher quality care for older adults, they just deliver costlier care. In fact, the opposite is true: quality is lowest in the highest cost states. What Atul Gawande did was take the research a step further, asking WHY? What drives costs in high cost areas? Atul did what he does for the New Yorker, an investigative reporting piece. He accomplished more with an investigative reporting piece than arguably any article in the New England Journal of Medicine. Makes me question my choice of a comparatively plodding research career…well, we have the blog.I won’t attempt to summarizing the entire article here — I could hardly do it justice — but in brief, Atul Gawande found that in McAllen Texas, doctors and indeed all of the healthcare industry revolved around a “culture” of money. Making money became the summum bonum of the medical profession in this Texas town. Atul Gawande doesn’t use this word, but I will: greed.

Now, I have a lot of physician friends who have received offers for high paying jobs in Texas. One million dollars a year for a neurosurgeon (this was 10 years ago). $800,000 a year for an anesthesiologist. It has become a standard joke among my decidedly northern, Midwestern, and coastal physician friends — how much money would they have to pay me to move to Texas? $800,000 a year? A cool mil? Can I be bought? I have long wondered, what is it about Texas that leads to million dollar a year salaries? Atul Gawande has identified a major piece of this puzzle, and it may be self-fulfilling, in that physicians who value money above other concerns decide to move to Texas.

This culture is not restricted to Texas. I have another anecdote I’ll share. I trained in primary care internal medicine in the same Massachusetts hospital where Atul Gawande practices surgery (met him once, nice guy, most eloquent outpatient surgical notes I’ve ever read). A primary care doctor came to speak to us during residency about life in the “real world” of private practice. He said, in a hush, “Here’s what they don’t tell you in medical school and residency. In the real world: you eat what you kill.” You eat what you kill — you are paid for what you bill for. He went on to tell us about how he had learned to increase his revenue streams by investing in an imaging center next to his practice for his patients. He talked about how we need training in billing. He talked about how we can’t bill for telephone and email contact so patients should schedule an office appointment. When we asked how much money he was making, he sat back with a self-satisfied look and said, “Oh I’m doing well. Very well actually.” And we sat there, wide eyed, and felt kind of sick and appreciative at the same time.

I do believe there is a culture of money among certain doctors, clustered in certain areas, and it drives health care costs. Of course, as many bloggers have noted, this is not a simple case of “bad greedy doctors,” — it’s far more complex — but profiteering on the backs of patients has certainly been a central driver to spiraling health care costs. Medicine is a business. But we need contraints around this business that reward doctors and systems of care that deliver the highest quality care at the lowest cost.

How does this relate to geriatrics and palliative care? It’s central. One of the most often used phrases in congress these days is “the high cost of care in the last 2 years of life.” This phrase makes one think about the overuse of expensive and intensive life-prolonging care. But geriatrics, hospice, and palliative care may not be above the fray. The Medicare Payment Advisory Committee (MedPAC) is concerned about the rapid rise in hospice costs (report here). Medicare payments for hospice tripled between 2000 and 2007 (to $10 billion). This rise was concominant with enormous growth in for-profit hospices. MedPAC is concerned that some hospices -particuarly those with financial relationships to long-term care facilities – may be cherry picking patients with long life expectancies, and avoiding the high cost hospice patients who live 7 days or less. While it’s easy to point the finger the other way — particularly when your profession is based on something unglamorous like caring for the elderly and the seriously or terminally ill — in these hard times, are we not compelled to look for waste in every corner of the system, including ours?

This Post Has 5 Comments

  1. Great blog Alex.

    Two comments:
    1) Dartmouth has been trying to figure out why. One of the things this McAllen thing has made me think of is what is the value of the IRB. Doing some ethnographic field work as a "researcher" requires significant work to gain acceptance through the IRB. As a "reporter," the rules for things like deception are much more lax. I don't think a researcher could have even published this article. Honestly, I'm not sure what I think of this…obviously we don't want to cause harm with our research and one could easily argue that Dr. Gawande's article did "harm" to the physicians in Texas.

    2) In the Dartmouth Atlas, San Francisco is actually one of the lower utilizing regions. This begs the very difficult question: what is the right rate or utilization? There is no question that McAllen is overutilizing, but is San Francisco underutilizing? Honestly, I don't think so but it is worth considering…

  2. I wouldn’t go as far as agreeing with the infamous words of Gordon Gekko that “greed, for a lack of a better word, is good”, but medicine is what it is now a days, a business. Are physicians really “bad” or acting unethically when trying to maximize returns on an investment (in this case the investment is an average student debt of $139,517 after medical school)? Many people I know in the business community would think it is a sign of pathology not to choose the option with the greatest return. The problem then isn’t the physician. It isn’t even the health care industry, as they too have the same requirement to maximize profits. The problem is really the entire health care system and its current basic design that incentivizes this behavior. A system where the most profitable entities are those that are performing the most procedures, the most interventions, and the most “costly” of care.

  3. It seems there is little question that financial incentives influence the practice of medicine. The evidence for this is quite compelling, but the the physician community often seems to have difficulty acknowledging this.

    I wonder if part of the issue is framing. Specifically, it seems an implicit suggestion that is often made is that only bad people act in their financial self-interest. Because of this framing, physicians often get defensive when there is a suggestion that financial incentives could be influencing their clinical decision making, and this defensiveness shuts off discussion.

    The truth is that good people respond to financial incentives. It is normal human behavior. We do it when we are not even thinking about it. Much of the behavior is subconscious, and we will respond to financial incentives even if we try not to. The reason financial structures have such a big impact on our clinical treatment decisions is because physicians are normal people—even good well intentioned docs respond to financial incentives.

    It seems once we acknowledge this, it then becomes easier to have an open discussion about payment structures and financial incentives can be aligned to reform the health system in a way that works best for our patients.

  4. I couldn't agree more. Enough with the holier than thou attitude that physicians have where we think we have mastery over outside influence. Our mesolimbic system, which plays an integral role in motivation to perform behaviors, is no different than that of Wall Street bankers, or for that matter rats that are trained to press levers to get rewards. It took us decades to come to the conclusion that incentives brought to physicians by Big Pharma (dinners, vacations, research grants) actually are very effective tools in changing our prescribing behaviors. How long will it take for us to act on the fact that financial incentives that focus on procedures impact medical decision making, just as much as that vacation to Hawaii from Big Pharma.

    Of note, in studies of rats that have been trained to press a lever in order to obtain a reward, they will continue to press the lever until the reward is received or fatigue sets in. This doesn’t bode well for our current health care system.

  5. Dan, you're right that the Dartmouth folks are trying to figure out the why, I was being disingenuous. The advantage of the investigative reporting approach is clear. Gawande’s article may well be a lesson on the need for this kind of reporting in a time when newspapers and other periodicals face unprecedented financial pressures.

    Ken, I like the framing perspective – that all doctors respond to financial incentives as part of human nature. The defensiveness of many physician bloggers has been remarkable. I just read a post from a physician who said something like, “when will people start to realize I make decisions based not on my pocketbook but on the needs of the patient in front of me!” and several other posts refer to Gawande as the “Ivory tower doctor,” "singing Kumbaya," disconnected from the real world of private practice. The brilliant aspect of Gawande’s article was that he outlined what happens when the financial incentives clearly align with explicit physician goals, at the expense of the healthcare system and potential detriment to the patient (excess testing, procedures, intervention, false positives, etc). The unintended consequence was portraying what is really a systems issue as a moral failing on the part of a group of physicians. To be fair, he did explain his findings in the context of contrasting health care systems that incentivized physician billing on a fee-for-service basis and population level care. Still, I understand how some reacted defensively.

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