Tuesday, January 29, 2013

Why is Medicare Wasting Away? by Govind K. Nagaldinne and Erin L. Bakanas*

When I moved to the Midwest from the West coast to be with my family, I accepted a position as a home care physician for a company which provided health care services to homebound patients. The patients were elderly, most of them bedbound or with a debilitating condition which prevented them from driving. Most of these patients were on a limited income, mainly Social Security benefits, and had Medicare and Medicaid insurance.

In my new employee orientation, I was encouraged by a company physician and the local office manager (a registered nurse) to order echocardiograms and Doppler studies every six months for all patients with a history of hypertension.

In the beginning I was uncertain about the reasoning behind obtaining echocardiograms every six months, but they did quote guidelines from experts in the field. The practice owned the echocardiogram equipment and the echocardiogram technician was an employee of the company. The echocardiogram tapes were mailed to out–of–state cardiologists. The echocardiogram reports were mailed back to the office in 3–4 weeks. Being new to the job, I ordered the tests as recommended, despite my misgivings. I felt uncomfortable, as most of the tests ordered were on stable hypertensive patients. Even after reviewing the echocardiogram results, I rarely needed to change my management of the patient.

My apprehension grew when I heard patients worrying about the copayment bills they had received. One patient said, “I will pay the bill because I do not want to lose the services you are providing.” I felt no better when an acquaintance of mine mentioned that a patient had complained to her saying, “the house call doctor ordered an expensive test but I did not hear the results of the test for six weeks.” I realized that patients were worrying while waiting for their echocardiogram results, and I did not feel this burden was in any way justified by the little information the testing provided.

I started attending weekly morning physician and office manager meetings. Every physician was given weekly productivity reports and Relative Value Units (RVUs) generated were mentioned during this meeting. Medicare compensates physicians for services they provide under the Supplemental Medical Insurance program, or Medicare Part B, on the basis of a fee schedule that specifies payment rates for each type of covered service. Payment rates are calculated in three steps: First, the fee schedule stipulates relative value units (RVUs), which measure the resources required to provide a given service. Second, payments are adjusted to account for geographical differences in input prices. Third, a “conversion factor” translates the geographically adjusted RVUs for a particular service into a dollar amount.

I learned each echocardiogram generated RVUs 3–5 times higher than that of a simple physician home visit. The manager encouraged us to meet a target of a certain number of RVUs per week by ordering blood tests, echocardiograms or Doppler studies.

The director from the company headquarters would visit the local office and encourage physicians to order more tests to boost up the low Medicare reimbursements. At every meeting, the director would make it a point to mention the company was unable to support expenditures with current insurance reimbursement rates, and needed additional ways to increase the reimbursements. Many times I felt that I might lose my job if I did not keep up my RVUs with the rest of my colleagues. I began to feel pressured to generate more revenue in competition with the other physicians employed by the company. I found myself ordering more laboratory investigations and radiological investigations to keep up my productivity on par with my colleagues. Wherein the patient expected honest and appropriate advice from me, I failed them in my responsibility by ordering more investigations in order to satisfy the company’s demands and relieve my own financial and employment concerns.

Motivated out of my sense of discomfort with this process, I had discussions with my colleagues, who reassured me this approach is legal. But I did not feel this was sufficient justification for practices I was beginning to question as unethical or unprofessional and I worried whether I was providing quality care to my patients.

I decided to review the data on the utility of an echocardiogram in a stable patient who has longstanding hypertension. According to the American College of Cardiology guidelines, an echocardiogram has a Class III indication for this specific clinical situation, meaning that longstanding stable hypertension is a condition for which there is evidence or general agreement that an echocardiogram is not useful and in some cases may be harmful. It is a fact that Medicare was allowing echocardiograms every six months for patients with hypertension. From the business perspective of my employer, this fact of Medicare guidelines was enough to make frequent echocardiograms permissible. The company further supported their position by arguing this practice was saving money for Medicare as the cost of house calls made by their employees over a one year period was less than the cost of a day of hospitalization for a serious illness. The company claimed that their services prevented hospitalizations. But when I did my own investigation into this claim, I found that appropriate home care provides necessary health care services to seniors. There is no data to support that more frequent physician home visits and diagnostic tests prevent hospitalizations.

I began to realize that the practices I was being encouraged, even pressured, to adopt were not only problematic for my patients’ financial concerns, but also for the larger healthcare system. I believe that every physician has an obligation to strive for the best stewardship of health care dollars and ensure that every cent spent is for appropriate patient care. Instead, I found myself in a classic example of medical waste, wherein the tests were ordered for the benefit of the physician and the company, with very little impact on patient care. By utilizing more healthcare dollars the company was claiming a larger portion of the healthcare resources available in the limited common pool called Medicare. This in turn contributed to rising healthcare costs, experienced by patients as higher premiums and co–payments, and leading to the threatened bankruptcy of Medicare.

I was left with a decision as to how I would handle the multiple conflicts of interest I was facing. Disclosure did not seem a likely option. I had been advised to tell my patients that tests were ordered, “just to make sure,” and also to remind them, “the results may take weeks.” Deep inside I felt uncomfortable knowing that this was unnecessary. But I also realized that, given the trust my patients had expressed, they were unlikely to question my orders even if they knew that the diagnostic testing was done by the company’s technicians and that the company stood to benefit financially from this arrangement.

Education is a second option for managing conflicts of interest. Being the newest physician in the group, I found I had little influence when I tried to get my colleagues to question these practices that kept their paychecks high but added unnecessary costs to patients and to the healthcare system. (Although I always felt I might have tried harder.) Educating our patients is another way wherein questioning the necessity and benefits of every test with their physician would help curb medical waste. But this would require an open dialogue between physician and patient, which was not encouraged in this particular setting.

Avoidance is the most straightforward way of dealing with conflicts of interest. It involves recognizing that something has the potential to create a conflict of interest and eliminating it. I tried hard to justify the tests clinically and limit the number of echocardiograms and Doppler studies. Even though avoidance is the best way, it is not an easy path to ameliorate conflicts of interest as this may require confronting the company and managers with the potential of losing one’s job. Alternatively, avoidance might require leaving one’s job and the resultant undesirable position of abandoning patients. During my brief period with the company I tried to minimize unnecessary tests, and knowing that the job was just a transition job helped me achieve that. I was fortunate to leave the company and move to a different city, but many physicians may not have that opportunity.

A few years later the company opened an office in the city in which I was practicing. A potential physician employee had been given my name by the company and he called to ask about my experiences and wondered what advice I would offer as to accepting a job with them. I replied that I never felt comfortable working for the company as physicians were given the notion the company’s finances were dependent on physicians’ revenue and we were pressured to order more tests than patients’ conditions justified.

* Nagaldinne is the primary story teller; Bakanas assisted with the writing of the story.

Copyright © 2011 The Johns Hopkins University Press. Narrative Inquiry in Bioethics, volume 1, issue 2. Used with permission.

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