Blog | Tuesday, October 13, 2009

The annual point when the biz of medicine gets me down.

Now that T.R. Reid and Ezekiel Emanuel and I have hung out (OK, so they lectured and I listened along with 2,000 other people), I like to imagine that I understand a little bit about how they think.

And I imagine they would have been just as depressed as I was with yesterday's session on how primary care practices can make money by going into the imaging business. There were so many wrong incentives involved, it's hard to even count. You can begin with the fact that the lecturer predicts continuing growth in the imaging industry because tort laws (or at least perceptions of them, I would argue) appear likely to continue encouraging defensive medicine.

Then there were the obstacles you would face, most notably the Stark laws. But a good health care attorney can find lots of ways to work around these, the speaker said. Take the example case offered in the session. The anti-kickback statutes prevented this practice from actually providing any imaging, so they decided to go into business buying imaging from the hospital. In other words, as best I can understand, the only thing that changed was that the primary care practice would now send all of their patients to the hospital for imaging, pay the hospital for the service, bill insurers and take a cut off the top.

The story is in some ways an argument for the effectiveness of government-run health care. The setup wouldn't fly with CMS, so it only applies to private payers.

I don't mean to necessarily condemn practices that do this (they're only being good capitalists after all), but when you think about where their profit comes from, it makes clear the defects in our system. The practice's slice must either being coming out of the non-profit hospital's pockets or the insurer's (and thereby all of their premium payers) and represents no actual goods or services.

And despite all the talk of cost-cutting, this isn't an issue that health care reform will probably tackle. Proposals like bundled payments and the medical home could even make such arrangements more convenient, the speaker concluded.