Medicare Physician Payments and Medical Errors

Medicare Over-Payments
& Medical Errors


Much is being made this week of the public release of physician-specific Medicare payments. Given that this has been legally prohibited for many decades by legal proceedings initiated by physicians, the backlash from physicians is predictably vociferous (see “None of Your Business: Docs React to Medicare Data Release“).

One doctor even commented on that article that this was “Another government solution in search of a problem”. Apparently our ridiculous healthcare spending (see “A Nation of Suckers“) isn’t a problem when you’re on the receiving end of it.

It’s true, however, that there are risks in releasing such payment data without any context of what the payments actually covered. Some include reimbursement for expensive chemotherapy medications, for example, and virtually all cover staffing and other operating costs as well (click here for more on the data shortcomings and here to check out doctors of your choosing).

These legitimate concerns, however, must take a back seat to the public’s need for greater medical transparency. And the profession – and the industry – haven’t done much over the years to earn the public’s sympathy or support with deliberate and highly orchestrated efforts to remain as minimally transparent as possible.

How Much is Unnecessary?

Highlighting what individual physicians are being paid by Medicare – which may be only a fraction of their total billings, by the way – would prove even more beneficial were we to consider that a third or more of it is wasteful and unnecessary.

We shouldn’t resent doctors receiving $20 million a year and more from Medicare, but we should definitely resent that $6 – 7 million or more of it may be a waste of our Medicare dollars spent mostly to fatten their coffers.

Paying over $20 million a year in Medicare billings alone to any individual physician should raise a red flag about both the quantity and quality of whatever service is being provided.

In other words, the question we should be asking is how many of these payments are actually over-payments for marginal and even fraudulent services (what I call “soft fraud” in Our Healthcare Sucks)?

Judging from the comments in response to the MedPage Today article, some doctors seem to think the government is attacking their profession. If you read the evidence I cite in the book, however, you might rather think many in the profession are attacking their patients – for their maximum revenue potential.

We apparently haven’t figured out yet that our experience with so-called “Medicaid mills” isn’t isolated to a handful of renegade physicians, but rather has seeped into the everyday practice of mainstream medicine – including Medicare. Not everyone, of course, but enough that it’s become pervasive.

Consider that over 90% of physicians surveyed admitted to practicing defensive medicine like hospitalizing patients who didn’t need to be hospitalized. Now you don’t have to know much about medical science to appreciate that hospitals are highly dangerous places, especially if you’re physically vulnerable.

So Much For “First, Do No Harm”

Even more than the money being wasted, we should greatly resent the patient harm that all these unnecessary treatments and other medical interventions are causing with their contribution to our astounding rates of medical errors.

Medical errors have remained stubbornly resistant to correction in American healthcare – and the reasons are both structural and economic. The economic factors discussed above are obvious and theoretically fixable – though I wouldn’t hold my breath waiting for those fixes to occur.

They essentially boil down to over-treatment with expensive medical interventions that – by their sheer volume – increase the risk of patient injury. The fact that many are invasive procedures obviously exacerbates the inherent risks of over-treatment, which isn’t nearly as benign as simply the excess spending it generates.

Even less likely to be fixed are the structural factors driving medical errors.

Medical care is generally provided in narrow “silos” by medical specialty despite the broad roots of disease throughout the body. Chronic diseases like heart disease, diabetes, and many cancers have systemic root causes, meaning they’re triggered by chronic inflammation, excess oxidation, compromised immune systems, or other conditions that disrupt healthy function.

In contrast, our entire medical infrastructure – from education and training to the daily practice of medicine – is built around treating localized symptoms (cancer of the breast or prostate, for example) rather than preventing the conditions throughout the body that trigger disease.

Dangers of Over-Specialization

Doctors are trained by medical specialty, which imposes a narrow construct for medical care that is often counter-productive. Of course, no single physician can know all there is to know about the human body, so a certain degree of specialization is a practical necessity for the learning process in medicine.

It’s in the transition from medical education to clinical practice that’s dominated by specialization that the real damage is done.

That’s because America’s medical infrastructure has been woefully slow to build “bridges” between physicians that would ensure the kind of smooth transitions of patient information and prior treatment efforts that one reasonably expects when it comes to such a serious “life-or-death” profession.

Miscommunications in medical “hand-offs” of patients among physicians is a notorious source of recurring medical errors the industry has proven unable or unwilling to effectively address.

And it’s not getting any better, not with 98% of recent medical school graduates opting for medical specialties over lower-paying primary care roles.

At an individual level, it’s hard to fault them for “following the money” when faced with six-figure medical school debts to pay off. But for our healthcare system – and for medical consumers – it spells more of the same: more fragmented care, more medical errors, more patients dying needlessly…and more unnecessary expense.

The important point here is this narrow, specialty-based perspective of medicine runs counter to addressing the broad continuum of disease better “treated” – as in avoided – with a less narrow, primary care focus.

Our core problem in American healthcare is an undersupply of primary care physicians and an oversupply of specialists that drives way too much expensive and unnecessary high-tech interventions.

Medical schools that perpetuate this pattern of over-specialization are obviously part of the problem, but so are academic medical centers and hospitals that reinforce medical practices that are inconsistent with patients’ needs.

Greater attention to patient lifestyles and other causes of disease doesn’t lend itself to medical specialization or even to office-based medical practice among non-specialists (primary care physicians).

Medicine’s Crucial Flaw

This gets to the heart of the matter: medicine’s crucial flaw is it remains a provider-and-profit-driven industry rather than a patient-and prevention-driven service profession.

Hospitals recruit doctors based on how much specialty revenue they can generate. New hospital services are created based on their income-producing potential, not whether patients actually need the service.

This reinforces a self-serving, profit-driven industry culture that feeds on itself, with personal and institutional income expectations ratcheting ever higher based on a glut of medical specialists.

CONSIDER: America has 5% of the world’s population, but generates 50% of its open heart surgeries. Yet our survival rates are no better than elsewhere.

This is despite the huge difference in expense such unnecessary care entails.

Indeed, U.S. heart disease and cardiovascular mortality is considerably worse than other developed countries [1] – again confirming that more care is often worse care.

Even worse, failing to consider patients’ broader needs and circumstances – as over-specialization encourages – leaves many patients at greater risk for adverse events from drug interactions and other treatment “side effects”.

These would be better recognized and avoided with a more comprehensive, or “holistic”, approach to care.

The bottom line is that specialized “silo medicine” – the foundation of medical practice – is bad patient care.

And it no doubt contributes to, and perpetuates, the kind of over-treatment that allows a single physician to generate tens of millions in Medicare billings alone – every year.

As consumers, we need to be especially vigilant to not fall victim to this self-serving and dangerous silo phenomenon that permeates medical practice – another reason to “think defense” first when it comes to your medical decisions.

Because there’s a lot more than money at risk here.

[1] Heart Disease and Stroke Statistics – 2009 Update. Circulation. 2009;119:e21-e181.

John Lynch: John Lynch was founder and CEO of Medical Diagnostics, Inc. - twice named to Business Week's "Best Small Companies" in America. He's since founded MedSmart Members to publish consumer health education publications.
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