How financial implications influence medical decision making

A recent article in the New York Times highlighted the high costs associated with some types of subspecialty medical care, in particular dermatological procedures like Mohs surgery. Indeed, the patient profiled in the piece went for a minor procedure which, including facilities fees and questionable referrals to an anesthesiologist and plastic surgeon, generated billing that topped an unconscionable $25,000.

This piece led to the predictable letters to the editor defending physicians’ (mostly dermatologists’) practices. Typical of these: “Dermatologists keep treatment costs low by diagnosing, treating and curing the vast majority of lesions in an office setting … The work of dermatologists is mostly cost-effective.” Underscoring the importance of their work, the president of the American Academy of Dermatology wrote, “More than 3.5 million new cases of non-melanoma skin cancer in the United States are projected each year, and an estimated 3,070 deaths from these cancers occurred in the United States in 2013.” The National Cancer Institute puts the estimate at fewer than 1,000 deaths per year.

Financial incentives and well-meaning doctors

For me, the deeper significance of the Times article lies in the way in which financial incentives can influence the judgment of well-motivated, well-meaning physicians. This is especially true because even evidence-informed clinical decision-making requires clinicians to make inferences and apply judgment. When the evidence to support a specific course of action is not clear-cut (arguably, the norm rather than the exception), a physician’s judgment may be influenced by such things as clinical experience (often useful, but also often misleading, such as extrapolating from the last patient’s experience to the next). Given the challenging nature of decision-making, don’t we physicians have a professional obligation to consider the impact of financial reimbursement as a potential conflict of interest when we offer treatments to our patients?

As a physician, I don’t doubt for one minute that the majority of physicians deeply believe that their recommendations are driven solely by their patients’ best interests. Some will talk about other drivers, such as defensive medical practice and demanding (and non-price-conscious) patients, both of which tend to increase the use of tests and procedures and treatments. But when the decision isn’t black or white (and it usually isn’t), we should recognize that what we, even as physicians,believe to be the best course of action might be influenced by its impact on our pocketbooks.

This is human nature, and it is well known that financial incentives influence behavior — even in medicine. For instance, it has been demonstrated that fee-for-service models (the prevailing healthcare reimbursement model in the U.S.) drive up costs compared with “accountable care” models.

My Mohs journey with skin cancer

Let me share a personal anecdote. Over a year ago, I was having stitches removed after Mohs surgery for a basal cell carcinoma on my scalp, a type of “non-melanoma” skin cancer that occurs commonly but rarely leads to death. The pleasant, well-meaning young dermatologist caring for me — who, I strongly believe, had my best interests in mind — suggested a full skin examination.

The doctor biopsied a mole on my chest and one on my arm; despite my protestations that I had had those marks my whole life, he felt they looked suspicious. When the biopsy came back as “compound melanocytic nevus,” he emailed me to say “You should keep up periodic skin full exams every 3 months at this time.” Every three months! Of course I ignored that — indeed, it’s been 15 months, and I haven’t gone back — but even though this frequency of checks/biopsies would have generated quite a lot of (unnecessary) billing, I truly feel that my doctor believed he was making a recommendation in my best interest. (Let me note for readers who might find the word “melanocytic” scary, since it sounds a lot like “melanoma”: a melanocytic nevus is a mole, or beauty mark.)

While I don’t think that my doctor’s recommendation was overtly driven by the desire to bill, I strongly believe that the financial incentive (as well as other incentives) had an influence on it. Even if he did not directly stand to gain from this (he might have been on salary, rather than rewarded with incentives), he was trained in a subspecialty whose belief in the value of such procedures is self-serving, and self-justifying. That doesn’t mean it’s necessarily wrong – just that there’s a potential conflict of interest there that ought to be considered.

Specialists highlight “questionable” activities

It is well recognized that the use of unnecessary tests, procedures, and treatments contributes significantly to our nation’s disproportionately large healthcare expenses. One positive step: An initiative called “Choosing Wisely” has asked medical specialty societies each to provide a list of five questionable activities in that specialty. More than 50 societies have joined the campaign, including the American Academy of Dermatology, whose items range from guidance on topical antibiotic use to best practices on when to perform Mohs surgery.

Physicians and other health professionals can rightly take pride in their membership in a profession that primarily seeks to contribute to the good of humanity. But we should also recognize that we, too, are human, and when our recommendations have financial implications, we should ask ourselves: How might this influence our decision-making?

Paul Marantz is associate dean, clinical research education and director, Center for Public Health Sciences, Albert Einstein College of Medicine, Bronx, NY. He blogs at The Doctor’s Tablet.

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  • http://onhealthtech.blogspot.com Margalit Gur-Arie

    “it has been demonstrated that fee-for-service models (the prevailing healthcare reimbursement model in the U.S.) drive up costs compared with “accountable care” models.”

    The Miller report cited to support this assertion does not seem to contain any “demonstrated” data. Instead it contains the usual “expert” opinion that fee-for-service drives up costs. Interestingly enough, the report is presenting costs across OECD data, but the comparison seems to stop short of comparing physician payment methods in those efficient OECD countries, which is largely fee-for-service.
    If looking abroad is too difficult, how about our own backyard, where Medicare fee-for-service is significantly cheaper than the variety of Medicare Advantage managed care schemes?
    And yet, all recommendations end up singing the praise of managed care, risk assumption, capitation, bundling and all sorts of things that have never been proven to do anything except lower doctors’ pay.

  • meyati

    So, should a doctor practice defensive medicine so aggressively? I get a full body check every 6 months, and I had surgery and radiation for incurable skin cancer——This is the ACS recommendation. My mother ship was ignored for over 25 years. I went to military, civilian, had 2 types of insurance-sat bare ass naked for 3 years at a teaching hospital, while dermatology students and the different profs looked me over- I kept asking about this thing at the inner edge of my nose.

  • disqus_question_everything

    “…financial incentives can influence the judgment of well-motivated,
    well-meaning physicians. This is especially true because even
    evidence-informed clinical decision-making requires clinicians to make
    inferences and apply judgment.”

    And then there are the cases where financial incentives override strong evidence resulting in patient harm. These are the doctors that should be “reined in.” The medical literature clearly shows the harm of hysterectomy and/or ovary removal yet these surgeries continue to be grossly overused with 76% not meeting ACOG criteria and only 2% done for cancer. 1 in 3 women has a hysterectomy by age 60 and 1 in 2 by age 72. These are disturbing statistics!

    Studies have shown the harm of removing ovaries even after menopause. The post-menopausal ovaries of a woman who still has her uterus continue to produce hormones (especially androgens that can convert into estrogen) into her 80′s. These are essential for good health. Yet a 2012 survey of gynecologists on their preferences for ovarian conservation yielded that almost two thirds consider bilateral oophorectomy (BO) appropriate in ages 51 to 65 and one third say it is appropriate in women under age 51. And consent forms allow oophorectomy to be at the gynecologists’ discretion after the woman is under anesthesia. 73% of women lose healthy ovaries at the time of hysterectomy.

    Why are insurance companies so quick to authorize these surgeries? Clearly, most are cases of overtreatment (and intentional harm), the biggest driver of high health care costs.