Doctors can play a major role to reduce waste

Thirty percent of health care spending — amounting to $750 billion a year — is wasted, according to a recent report by the Institute of Medicine.

I know. As a doctor, I am party to this waste, and I think doctors can play a major role in recovering it.

In a private conversation, a cardiologist tells me about his partners — “loose guns” he calls them. “At the hint of chest pain they will do a cardiac cath and this makes everyone happy,” he says. The patient feels good that something was done, the doctor gains certainty of his presumptive diagnosis and the hospital makes money. While it may seem like a win-win-win, in fact, we all lose as the health care expenditure tops $2 trillion, siphoning funds from education, housing and business innovation.

The IOM report notes that unnecessary services are responsible for nearly a third, or $210 billion, of wasted expenditure.

I, too, order excessive services like CT and MRI scans, without regard to cost. Often these services are in the gray zone of medicine where it is unclear if some procedures are really necessary.

While it is hard to pinpoint which individual doctors or hospitals are the big spenders, regional data show unwarranted high costs of care, with little difference in quality. The Dartmouth Atlas shows that the annual cost to care for a Medicare patient in Miami is nearly twice that in Minneapolis ($11,352 vs. $5,213). Memphis is somewhere in between. Perhaps Miami Medicare patients are sicker or poorer patients, but that does not fully account for the difference.

When we doctors talk about waste, we often beat around the bush. We know the system is full of waste, but when confronted we blame the patients or malpractice attorneys.

My cardiologist colleagues tell me it is patients who “demand more be done.” In part this is true. Studies show that often patients feel that “more care is better care.”

And it’s true that fear of being sued contributes to doctors practicing “defensive” medicine. But when the threat of litigation is reduced, with lower caps and stringent regulations, as was done in Texas and Colorado, the cost of care did not go down. Perhaps overutilizing health care resources has become a bad habit, ingrained in our medical culture.

There is another less-talked-about reason for unnecessary services. One person’s waste is another person’s income. Another cardiac catherization, another back surgery means more income for doctors, hospitals and the health care system and its archaic administrative services.

The IOM report found that nearly a quarter of all the waste, $190 billion, is due to unnecessary administrative costs. Last week I was irate on the phone with a nonmedical clerk at the insurance company, telling her why my patient needed a specific medicine. This third customer service agent asked me to fill out a form which would take “just 20 minutes.” Insurers have created hoops and hurdles, costing providers time and money and adding to the waste.

The IOM reported other areas of waste that include inefficient delivery of services and unnecessarily high costs of treatment. On a Friday afternoon when my office is closed and a patient calls with a problem, which I cannot sort out over the phone, I send them to an ER, an inefficient site of service costing four times more than a clinic visit. Unnecessarily high cost is what I experienced when my daughter injured her nose playing touch football and the hospital charged me $438 for an X-ray, while the charges at another nearby clinic was only $137.

So how can we reduce waste?

We need to follow bank robber Willie Sutton’s rule: go where the money is. Ultimately, it is the physician who orders the procedures, the imaging, and the medicines. In fact, we doctors joke that the most expensive medical instrument is the doctor’s pen, accounting for 80 percent of the health care expenditure. To reduce waste, doctors need to become integral partners in the cost-cutting process.

For years, as a doctor I have taken what I thought was the high moral ground. Costs don’t matter, I believed. All that matters is that I care for the physical and mental well being of my patients as best I can.

I behave this way because this is the American culture of medicine and this is what I have been taught. In medical school during pharmacology class, I memorized the generic, the trade and the pharmacological names of drugs but not their prices. During my internship if I mentioned that we were doing unnecessary expenditure on a dying patient, I was frowned upon. Yes, some mentors encouraged us to use cheaper generic drugs, yet that was often an afterthought. We, the doctors, did not want to let money influence patient care. So today most doctors care for patients with little or no knowledge or concern for cost.

With the cost of health care and excessive waste leading to a budget crisis and personal bankruptcies, doctors like me are in a dilemma: should we be making patient care decisions based on cost? Will cost-conscious doctors prejudice their alliance to their patients and violate doctor-patient trust? When I discourage my patients yet again for a test, will they wonder if I am saying this because the test is really unnecessary or because it costs too much?

Here is how I see it. There is 30 percent fat in our health care system, and I am convinced of this not just because the IOM report says so but other nations like Canada, Norway, Finland and Switzerland, only spend 12 percent of their GDP on health care compared to our 18 percent — yet provide equal or better quality of care.

While doctors might not be able to eliminate all the waste, we can do a lot. If we only practiced evidence-based medicine — that is only do those tests and surgeries which have a proven benefit — and not be “loose guns” with our health care dollars. Yet, in return doctors will need legal cover which will make us immune from lawsuits if we followed evidence-based guidelines, and a bad outcome occurred.

How will all this affect my own practice of medicine? I’d like to say I’ll think twice before I order that next MRI. And I might practice a little more “wait and see” medicine, rather than rush to order expensive tests or treatment. Will my patients object? Will I follow through? In all honesty, it’s hard to say. To reduce the waste in health care, American medicine requires a culture change, and the doctors have to lead it.

Manoj Jain is an infectious disease physician and contributor to the Washington Post and The Commercial Appeal, where this post originally appeared.  He can be reached at his self-titled site, Dr. Manoj Jain.

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  • rswmd

    Back to reality:

    I have a patient in my office who needs an urgent scan. Their insurer pays $8000 to have it done at the local hospital; $1000 to have it done at a free-standing radiology center. Regardless of where I send the patient, my staff and I are facing 60-120 minutes of administrative work to get an approval, typically culminating in a mind-numbing “peer-to-peer” review between myself and a doc who hasn’t even been given the patient’s name, much less any clinical information. Not being able to close down my office in that way, I send the patient to the ER at the hospital, turning a $1200 bill into a $20,000 one.

    “As a doctor, I am party to this waste, and I think doctors can play a major role in recovering it.”

    As long as 95% of what is recovered though my hard work goes into the coffers of for-profit insurers, and then onto their execs and share-holders, I feel absolutely no social or moral responsibility to waste my time doing so.

  • khmd

    Dr. Jain,

    As a fellow physician I find your insinuation that physicians are the problem insulting and inaccurate. There are many systemic reasons why we are forced to contribute to medical waste. We are all familiar with these issues. Possible litigation is a huge risk that I will not take any more than I have to. Patients and referring MD’s expect SOMETHING to be done. Oh by the way we are being graded by Medicare on patient satisfaction now and lower patient satisfaction will lead to lower reimbursements. Also, it turns out that our best clinical judgement is sometimes wrong. After all of our training we are sometimes wrong. Except we are not allowed to be. If I use my best judgement and don’t order a test but then the next guy orders said test and finds something bad, that is a lawsuit waiting to happen. Also, if I am determining whether or not to order an expensive test, most of the time the “best care” does involve completing that test. We are obligated to give our patient’s the best care. When the malpractice laws change to allow for the most cost effective care and not the best care, I think it will be easier to avoid expensive testing. Even then, the general public will have to accept that the best care is not available to them. That will be a hard sell.

    I can tell you that I believe that while there are some physicians of questionable character, the vast majority of physicians that I have the privilege of knowing have a great deal of integrity. We physicians are not the problem. I can live with the general public and politicians being upset with us. They are not equipped to understand our situations. This article coming from a fellow physician, however, is hard to stomach.

    We physicians don’t stick together enough to fight the system, in part because we aren’t really allowed to and in part because the truth that American medicine is a business is really unseemly. We aren’t supposed to talk about it. I think this is a shame because it needs to be talked about.

    Pardon me while I ramble a bit. I took a huge risk and sacrificed the prime of my life to become a physician. A major goal was to help people and a major goal was to provide for my family. So far I have been successful at both. So many things had to fall into place for this to happen. Getting into medical school, paying for medical school, passing medical school, passing national-level exams, getting into residency, surviving residency (80 to 100 hour weeks can’t be healthy), making chief resident, getting into fellowship, passing specialty board exam, passing subspecialty board exam, getting a job, finding out (some of) the realities of the business of medicine, quitting my first job, learning how to set up a practice, learning how to set up a business, borrowing a ton of money, hiring 10 people, and now I’m doing OK, and honestly I am not sure when I will settle my original business debt, much less my 30 year medical school loan. The point is, a misstep at any one of these points would have sunk me (and can still sink me) and left me in a really depressing hole. I actually managed to pass every one of these points. On top of that I’m good at my job and my patients like me. Despite these positives, my practice might fold within 5 years given the current economic conditions. I’m sorry if I’m forced to look at medicine like a business, but I really don’t want to go back to another job that I hate after everything that I went through. Also, going back to a job that I hate will definitely lead to a lower quality of care for my patients. I think we will see the results of poor physician morale over the next few years…

    So, If I have to provide the best care and keep my customers healthy and happy, I think I will keep doing so.

  • kjindal

    The problem with pieces like this are that policymakers (eg. medicare) read it as gospel because it’s coming from an “insider” ie. a physician, without regard that the incentives & disincentives affecting the actions of employed physicians are almost diametrically opposed to those in private practice. Then medicare policy, e.g., do dumb things like the following (true story, happened to me a few weeks ago):

    I saw an elderly gentleman in my office about 3 yrs ago, hypertensive & diabetic but with no known h/o CAD, complaining of vague epigastric and chest discomfort. Seemed atypical but given his age & diabetes, I decided an EKG was appropriate. So after whipping out the $2000 EKG machine and paper that had been otherwise collecting dust (I think I did about 2 ekg’s a month when i maintained an office practice) it was done & interpreted as nonacute, and I sent him on his merry way, reassuring him for now but warning to call me or go to the ER if symptoms returned or became more typical. I had billed medicare the 99213 and 93000 codes for the visit & EKG, respectively.

    Now fast forward THREE YEARS to October 2012. Medicare sends me an ominous letter demanding back the $20.17 for the EKG fee as “not medically necessary”. They indicate that they asked for records which I did not provide (never got a letter, and quite difficult to speak to medicare during the day, when I’m busy seeing patients, and ultimately NOT WORTH IT for the $20). But let’s see how this affects costs: I tell two of my MD friends about this experience, then they tell two friends, etc. And we are all thinking the same thing: the next time I see an old guy with medicare who needs an EKG, just SEND HIM TO THE ER. SAVES ME THE HEADACHE WITH MEDICARE, SAVES ME A POTENTIAL LAWSUIT. SCREW COSTS. IF IT’S MY LIVELIHOOD & FAMILY ON THE LINE FOR $20, THAT’S AN EASY CALL. So to save that $20, let it cost the “system” upwards of $10,000 (ER evaluation, serial enzymes, telemetry, cardiology consult, maybe stress test after ruling out MI, etc.)

    what a bunch of morons. But then again, can you blame them? after all they’re just listening to us “experts”.