Medicare’s perverse incentive to keep patients on dialysis

One of the most subtle deceptions hidden inside the cracks of our sick care system is the lie told to doctors: that health is our primary goal for our patients.

I began to understand this paradox clearly when I listened to my friend’s anguish.

She’s been working as a full-time medical assistant in a busy nephrology practice, supporting two sometimes three full-time sub-specialty doctors. The practice is located in a small town and serves a regional population for the last 25 years. It’s approximately 90 percent Medicare beneficiaries.

Every month or so, I’d call her to see how she was doing. And each month, I’d listen to an earful. There was always an escalating amount of work to be done amidst health insurance and Medicare game playing: begging for medication approvals, fighting against denials for procedures, image tests or post-transplant drugs, dealing with arguing between pharmacists, insurance authorization reps and the practice’s doctors, implementing a new electronic health record that had more down time then up, and struggling to collect practice revenue. The clinic even hired a third-party business and billing company at great expense to help. Needless to say, tensions ran high.

A few months ago, my friend confessed that she had a stack of sympathy cards on her desk to send out, a pile that kept getting higher every month.

“My doctors really don’t want their patients to go for dialysis,” she told me proudly. “In fact, one of them said the more he could delay dialysis, the healthier his patients would stay.”

Medical practice for these small town doctors has gotten difficult. They’re trying to stay abreast of rising business cost, families and houses. They work harder and harder every week, with new Medicare or insurance policies and regulations to face first thing Monday morning. Now, their struggling with their militant practice management company that seems to take away their professional autonomy on a daily basis.

Things have become so tight that despite my friend’s above and beyond work ethic (she used to work for me) she’s been told recently that she’ll get fired if she spends 7 minutes or more overtime per week.

Medicare is at bare bones payments these days, with other insurance companies paying below Medicare, a phenomena that traditionally didn’t happen. One of the only procedures however, that these doctors can still capitalize upon is dialysis.

One night over dinner, I asked her a few questions.

“What do your doctors want to do with their lives?” I asked.

She snorted. “I can tell you right now what each one of them would rather be doing, and it isn’t working inside this clinic anymore!”

“So why don’t they leave?”

“Are you kidding me? They can’t stop now. They’re miserable but they can’t quit. They like the money too much.”

“So they’re doing same things again and again, working harder and harder to make ends meet, playing more and more games and feeling miserable, frustrated and angry … and they feel they have no choice? What about their patients?”

“Well, they still get paid OK on the dialysis. In fact, they own part of the local clinic in town,” she replied. “They weren’t too happy when a competitor came in right next door.”

“So dialysis pays the best right now of all the things you guys do?

“That’s right,” she said.

“So what are they going to do if Medicare drastically cuts all reimbursements for ongoing pre- and post-renal transplant management, but is still willing to pay decently for dialysis?”

“I don’t know,” she sighed.

“Do they have any incentive to wish their patients healthy and not recommend dialysis, given their current practice situation?”

She stared at me. “Well, no,” she said hesitantly.

“Tell me this. When they still can’t meet their bottom line, what will they do to keep up their reimbursements?”

She laughed. “They’ll send them for peritoneal or hemodialysis!”

“So let me ask you this. Do these doctors really want to keep their patients healthy, or do they have to keep them sick?”

Natasha N. Deonarain is CEO and founder, Conscious Health Solutions.  She is the author of The 7 Principles of Health and can be reached on Twitter @HealthMovement.

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