Doctors? Businessmen? Or Both?

November 3, 2009 -- Reform of how we pay for healthcare is the hot topic of the day. I myself have expounded on this with excoriations of the health insurance industry. Blue Shield, Anthem, Aetna, Humana and their ilk are now everybody's favorite whipping boys and it's not undeserved. The relationship of these companies with their customers is by definition adversarial. They do their job "best" (in terms of profit-making) when they succeed in denying health care. But there is another, less obvious villain driving our costs up and our outcomes down: doctors who are also businessmen.

I am not the first to recognize doctors' conflict of interest. It has been documented in widely-circulated articles such as NPR's 10/8/2009 story, "The Telltale Wombs of Lewiston, Maine". Another article on the same theme in the New Yorker (6/2009) has also gotten a lot of attention. Named The Cost Conundrum, it observes that when MDs are businessmen, health care gets expensive.

Indeed, there is an entire science devoted to the analysis of patterns of consumption of medical care and their effectiveness in terms of cost and and outcomes. It's termed utilization review and is naturally a topic of great interest to health care payers. Why has it failed to bring to light these maldistributions of service? Why is this issue not part of today's debate?

The NPR story describes how "...in Lewiston, 70 percent of its women would have a hysterectomy by age 70." The reason is not an unusually high rate of uterine disease; a now-famous longitudinal study revealed that numerous communities around the country have anomalous rates of certain medical procedures. The study showed "...how bizarre the distribution of care was. People in one town would get their hemorrhoids removed five times more often than people in another town only 30 miles away. Ditto with mastectomies, prostate operations, back surgery." How are these anomalies explained?

It is doctors, not patients, who drive consumption of medical services. Doctors who are paid for each service they render ("fee-for-service") tend to recommend those services to their patients. In other words, money. This is not to say that doctors are intentionally exploiting their patients but it is clear that their objectivity and judgement is colored by their own financial interest. "The U.S. health care payment system rewards doctors for taking action and doing procedures. This reality is so powerful that it hasn't just changed the individual behavior of doctors... the specialties themselves have changed, bending like flowers to the sun, moving toward the source of heat."

How should we solve this problem? Neither article goes so far as to propose a solution but I will. I propose that our healthcare payment reform legislation include language to do away with medical fee-for-service. A primary care doctor who also offers (and orders) ancillary services or tertiary care has, by definition, a conflict of interest. Why is this a revelation? Why hasn't it always been prohibited? What should we do about it? Here's what: put all doctors on salary instead. They should be paid the same no matter how many (or how few) hysterectomies they perform.

Of course this is politically impossible. The AMA and others would rebel and not mildly. But I have seen other countries (e.g. Italy where I just came back from living for a year and was most impressed by the quality and equity of the healthcare system) where it works just fine.

For me personally, this conundrum has an additional dimension. Among my closest friends are several doctors. Some of them are quite entrepreneurial and thriving. They work hard and well, and their ethics are impeccable. They would not appreciate the sentiments I express here. In conclusion, it can be said only that the healthcare debate is convoluted indeed.

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