.
Health care is a complex business. “Business” in the sense of “a human endeavor”, but also as “an organization seeking to make a profit.” Over the last several decades we have seen increases in the portion of health care delivery services that are formally organized as “for profit”. Hospitals, especially, have undergone such changes, joining the ranks of long-term care facilities, pharmaceutical companies, device makers, home health agencies, and insurance companies that have always been primarily “for profit”. Indeed, most physician practices, whether solo, small-group, or large group, are for-profit, organized into “professional” or “limited liability” corporations.
“For profit”, however, means that these organizations pay taxes, but because an organization is “not-for-profit” does not mean it behaves significantly differently. Not-for-profits are granted this status because a significant part of their activity is providing a public good, and their income-over-expenses (profit, which we can call “margin” to be less confusing) is not owned by shareholders but is rather intended to be re-invested to further enhance that public good. But not-for-profit hospitals generally follow very similar business practices to for-profit. They have to “compete for market share”. While they may have a mission, they often cite the mantra “no margin, no mission” as they invest in high-margin product lines (heart disease, cancer, neurosurgery) to attract more paying customers. Rather than, say, spending that money providing their wonderful care for free or at great discounts to the poor and uninsured. Or expanding their provision of high-need but low-margin services (primary care, obstetrics, pediatrics, psychiatry). The salaries paid to management of not-for-profit hospitals and professional personnel are often as high as those paid by for-profits (who, after all, have to maximize profit to please their shareholders, so want to keep costs, largely salaries, down).
So what is reasonable profit in health care, for companies that are for-profit? Should there be any? Does competition with for-profits distort the behavior of non-profits or would they act in the same ways if they had to compete only with other non-profits? Is competition good or bad? And what about doctors? Do they behave differently in their practice if they are salaried or have an incentive to make profit? Is this a good thing or a bad thing? So many questions!
In their commentary “Physician stewardship of health care in an era of finite resources” (JAMA 27Jul2011; 306(4):430-1), David B. Reuben and Christine K. Cassel address some of these issues. They start by noting that “Although there are varying opinions about the quality of health care in the United States, there is consensus that it costs too much.” I would guess that this is probably true, but may be as far as it goes. I suspect that each individual player or industry dependent upon health care dollars is unlikely to think it is their part that costs too much. It’s those other guys!
Reuben and Cassel focus on physicians. Not on how much physicians earn (salary or profit), but how they choose to spend health care dollars, because “Health care costs are directly related to decisions made in clinical practice”. They go on to say that “These decisions are difficult to influence because they are made in the context of individuals who are often sick and vulnerable, with little understanding of the potential benefits and risks of diagnostic and therapeutic options. Patients seek help from physicians and physicians chose careers to provide this help, or at least the hope of it. Because of this relationship, it is futile to expect that changing physicians' behavior through evidence and shared decision making alone will solve the problem of high health care costs. Alternative approaches will be necessary.”
Cassel, the President and CEO of the American Board of Internal Medicine (ABIM, the organization that certifies internists; not to be confused with the American College of Physicians, ACP, the internal medicine professional organization), is both a geriatrician and a medical ethicist. I have heard her discuss physician stewardship in individual cases, arguing that the use of resources ordered by an individual physician for an individual patient should not be based on issues other than the benefit and risk for that patient, since the physician and patient have no control over what money “saved” might be used for. (My patient and I cannot decide to not do expensive interventions and instead use the money for housing the homeless or feeding the hungry – unless s/he is that rare person paying all the costs out of pocket -- all we can decide is whether to do those interventions or not.) Savings have to be looked at on a more global level, with a shared understanding of what those “saved” dollars will be used for.
The contribution that Reuben and Cassel make in this piece is to provide something of a taxonomy of physician stewardship, examining the various levels at which it can occur beyond that of individual patient decisions. These include the “highest” level, of national and state policy where spending decisions (initially, one presumes, via Medicare and Medicaid) should be based on evidence of benefit and consistency with national policy objectives (such as, I imagine, Healthy People 2020). The second level is that of payers (insurers) who would choose to pay for interventions that are shown to be beneficial (and presumably cost effective) rather than those that are ineffective or marginal. They suggest that rather than charging high deductibles and co-pays for services that are known to be beneficial and cost-effective, they simply do not pay for those that are not. This makes sense; why should insurers pay even a significant portion of procedures that are of little or no benefit while excluding such things as hearing aids that are of great benefit and (relatively) inexpensive?
The third level that they address is the practice level, where groups of physicians can use evidence to guide their group decision making and decrease inappropriate variation in physician practice. An example of this would be the use of a limited drug formulary emphasizing generic medications (this could also occur at the insurer level). Finally, there is the individual patient level; while making cost-effective decisions at this level can be more complex, it can certainly be done. While it is certainly unfair to ask a sick person to decide upon the choice of having, or not having, a medical intervention that they can scarcely understand so that saved dollars may possibly benefit some unnamed person more, it is quite a different thing to educate people about the impact of their health decisions, especially before they become critically ill. Advance directives, such as living wills, are one method, but there are many others.
What is clearly unethical and unacceptable is for physicians to encourage patients, sick or well, to undergo a diagnostic or therapeutic intervention because the physician stands to gain financially from doing it. Unfortunately, this happens. Sometimes it is done consciously, but often it is because the physician who does the procedure (and will happen, coincidentally, to benefit financially from doing it) truly believes it is of benefit. To not believe it would, in fact, be cognitive dissonance. Although there are increasing numbers of procedures being called into question for everyone, there are far more that are of benefit to some people but not to others. It is the ability of physicians to distinguish between these people and present recommendations honestly and free of financial bias that will make the biggest difference. The fact that there are still many physician-owned for-profit hospital and “surgi-centers” in which the doctors benefit financially not only as the providers but as owners of the facility from more procedures being done argues that we have a long way to go. (See also my commentary in an earlier post, Greed, corruption and medical procedures: ignoring or suppressing the evidence?, August 12, 2011.)
The greed of human beings is not going to be wished away, whether they are physicians or lay corporate executives; whether of for-profit or not-for-profit companies. The taxonomy of Reuben and Cassel is useful for thinking about these issues, but it is only comprehensive – and thoughtful and balanced – regulation that can be sufficient impetus to make these changes happen.
.
