Physicians

The Stunning Shift Toward Employed Physicians

By DAVID E. WILLIAMS

I’m amazed at just how quickly physician employment has swung from small independent practices to hospital-based employment. I’ve heard about it anecdotally from medical societies and malpractice carriers who are seeing their constituents shift, and have certainly observed the shift from individual physicians, but I’m still surprised how fast it’s occurring. A new report from recruiter Merritt Hawkins tells the clearest story I’ve seen:

  • In the last 12 months, 56% of physician search assignments have been for hospital jobs, whereas 5 years ago it was just 23%
  • Just 2% of assignments were for independent, solo practice docs compared with 17% 5 years ago

Doctors are becoming more like regular wage earners, albeit high paid ones. There are some strong drivers of this trend including the need to support health information technology, comply with regulations and deal with health plans. There’s also a desire on the part of a younger, increasingly female physician workforce to have a better balance between work and home life. If anything the forces pulling physicians into hospital employment will strengthen in the near term with the arrival of Accountable Care Organizations and other forms of deep integration.

Yet when a pendulum swings it tends to swing too far. Especially considering how quickly things have moved, I do expect that there will be some backlash to the rush into employment. It’s really not all that much fun having a boss, especially when that boss is a big, bureaucratic hospital with other things on its priority list besides MD satisfaction and career development. Patients may not like it so much either. I know I’d rather see a physician who’s not too tightly tied to a hospital.

So what will the reversal look like? I don’t think it’s going to be doctors rushing to put up their own shingles or buy practices of retiring docs like in the old days. Instead I expect to see a new breed of physician employers who recognize what’s needed to make docs happy, treat patients well, manage compliance, and still make money. One example is so-called direct primary care practices such as Qliance. Time will tell what other forms develop.

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85 replies »

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  2. As a physician in practice for over 25 years, the trend is alarming. Physicians who join hospital systems will be very disappointed in their salaries as Medicare and Medicad payments to these institutions reduce in the coming years. Hospitals are businesses like any other, the difference being that the vast majority of their payments are based on Medicare rates. As the federal government continues to allow Medicare to become insolvent, Medicare rates will be cut dramatically over time. As the rate cuts occur, these newly salaried “employee physicians” will see lower paychecks. It will take five years, but we can have virtually 100% certainty that this will occur. Anything else is just not financially feasible. By jumping ship and joining the “safe haven” of a hospital job, they are guaranteeing lower paychecks in a dramatic fashion very soon.

  3. I totally agree the shift is dramatic. Having after 20 years in private practice just finished my first two years as an employed physician I can tell you the only comforts have been the continued support of patients and a steady paycheck. The rest of it is a wash. Under layers of administrative voodo unsafe or nonproductive activities that one could see changed quickly in private practice now are no longer changeable. I have seen my principles regularly compromised. Buyer beware.

  4. The ultimate physician employer is the patient. Physicians who collaborate with their communities and patients will be designing the clinics of the future.

    Inspiring models: http://www.youtube.com/watch?v=4YJz5wvt2bk
    and http://www.youtube.com/watch?v=dtEFIFqhw6I

    Pamela Wible, MD
    3575 Donald St. #220 
    Eugene, OR 97405
    (541) 345-2437
    http://www.idealmedicalcare.org

    “(S)He is the best physician who is the most ingenious inspirer of hope.”
    ~ Samuel Coleridge

  5. Yes, you would be pleased with the status quo that is to be Obamination care, automation health care without dissent or individual attention, just cookie cutter bs that focuses on money, and oh, who gets to pocket the alleged savings that will be made, as there always will be a profit margin in health care, even though politicians won’t admit to that.

    MD as Hell is right on the money, “..no one has to care anymore.”
    Enjoy your provider who quotes standards of care that do not care who or what your issues are.

    PPACA. The new abbreviation for “hear the lie enough and it becomes truth.”

  6. @MD as HELL
    What a screen name!
    I hope your bedside manner is not as harsh as your curmudgeonly public persona. If all I had to go on was your comments I would never want you for my PCP.

  7. Tort reform is not the answer. We need tort elimination. Malpractice awards need to be removed from the court and handled like worker’s comp. The huge awards have never ever been justified.

    DeterminedMD, I glaze over when I try to read Ms. Mayer. In general I agree with everything you say.

    This post started about employee docs. Fact is medicine has become too complicated to do both. It did not used to be that way. Not every town had medical care. Private practice was the only model. Fee or no fee for service. Docs adopted a town or a population. Technology erupted and the government got into the direct to the voter benefits game. No hope now.

    There is no way a primary care doc is going into private practice. There are too many clinics funded by Uncle Sugar to compete with. Collections are stunted. Charges are capped. You have to do it the JACHO way and the CMS way and do it with “meaningful use” which is somehow evidence-based, satisfy the patient for the Press-Gainey surveys, all in 6 minutes. Add a side of “do you feel safe at home” and “are there guns in your house” and you have the future of primary care. Who would want that as a career? No one would design such a beast.

    There is also no way to retire on the likely returns on a retirement plan, which you get to fund yourself. Give me matching funds and a defined benefit plan anyday. Give me a state government job.

    The big problem is that no one has to care anymore. Patients beware.

  8. @Dr. Mike
    Fascinating approach, albeit a political stretch to enact. (I have a hard time imagining what interest groups might support or oppose such a construct.)
    Pushing arbitration to the community (county) level would make it tough to abuse since all parties would presumably be obliged to live together with the results. School boards, grand juries and local draft boards are already precedents for such a system If adopted locally via referendum (I’m thinking smoking bans, liquor laws, land use codes, etx.) with state and/or federal waivers it might even be constitutional.
    The more I think about it, the better I like it.
    Would this board be elected or appointed? And if appointed, by whom?
    A five member board with two elected, one appointed and the other two selected by the local medical and bar associations respectively would be a balanced mix.
    Hmm…
    Just brainstorming.

  9. Given tort reform in many(most?) states why are we even discussing medical malpractice? It appears that this system is self regulating since you need a major injury for the lawyer to even consider your case.

    “It would be difficult to simply make a list of the types of malpractice cases that are good or bad. Each case is unique and needs to be considered on its own particular merits and facts. But there are certain issues your lawyer will have to work through before deciding if he can accept your case. Since malpractice cases are so expensive and time consuming to pursue, one of the first questions your lawyer will need to address is whether the case is economically justifiable. A lawyer may spend as much as $50,000 to $100,000 in out-of-pocket expenses plus two to three years’ time on a single malpractice case. If a potential case only involves a temporary misdiagnosis of a medical condition, and the correct diagnosis was eventually made with no significant permanent injuries, then that probably is not a good case to pursue. No lawyer would want to risk two years of his time and $75,000 of his money on the possibility that he might recover $25,000 for his client. No client would reasonably want to pursue that type of case either. Legitimate small damage malpractice claims may be inappropriate law suits because the cost to the lawyer, and the potential benefit to the client, simply do not justify a lengthy, expensive legal battle.”

    “Assuming the damages are serious enough to justify bringing suit, the lawyer must also determine if there is liability, i.e. did the action or inaction fall below the professional standard of care. He will most likely have to hire one or more doctors as expert witnesses to testify on this issue. Usually at least one expert will be hired before the suit is filed and additional experts are often hired before the case proceeds to trial. These experts will also help establish that the negligent conduct was the actual cause of the injuries complained of. Sometimes this is obvious, and sometimes not. For example, in cases involving negligent delay in the diagnosis of breast cancer, it may be easy to establish that the defendant misread a mammogram, but very hard to establish that the patient would have survived if only the cancer had been diagnosed six months earlier. Complicated medical questions arise such as what type of breast cancer was this? What size was it? What was the cancer cell doubling time? How far had it already spread when the misdiagnosis occurred? This issue of whether the alleged negligence actually caused any injury to the patient, or if so, then how much injury was caused by the negligence and how much was caused by the preexisting medical condition, is the main focus of many malpractice cases.”

    “In Georgia lawyers are required to attach an affidavit from an expert witness at the time of filing the lawsuit in court, stating that the facts justify the claim.”

  10. @ John Ballard
    If it were up to me to design a system for medical malpractice claims, I would have each county set up a board (to include physicians and lawyers) that would evaluate each claim prior to it proceeding. They would determine if the patient suffered harm, and if that harm could have been reasonably prevented. Valid cases would then go to arbitration. Invalid cases, or those that failed arbitration could go to a loser-pays-all-costs trial.

  11. Maggie have you ever held a real job at any time in your life? The stuff you say is so far detached from reality I’m honestly curious what sort of life experience you have had to develope these.

    “But it would be much less costly for payors (insurers, hospitals) to settle quickly than to pay the very high administrative costs associated with suits that usually go on for years.”

    Um, no it isn’t. The reason we figth these claims is becuase it is cheaper then paying them. I would think that is common sense. Do you really think these tens of thousands of executives and defense attorney’s have no idea what they are doing but Maggie Mahar with her hours of internet reserach knows better? Your liberal short commings are flaring up, that mental deficency that allows liberals to be liberals, you can’t see the consiquences of your ideas.

    Why is Medicare and Medicaid so easy to rip off via claims, set guidelines that are easy to learn and manipulate.

    Why is SS Disability so wrought with fraud, same thing, a regulated and defined set of rules that are more important then the facts.

    PigFord discrimination settlement, again nothing but a fraud.

    If you passed regualtions like you suggest everyone with any medical error would be getting a payout, even those that are no harmed. Most medical errors don’t result in any adverse consiquences, that is why most medical errors aren’t compensated. If you start reimbursing people for the error not the consiquence your cost will sky rocket. If you start defining all this in an administrative program people will learn it and game it like they do immigration, disability, welfare, and everything else.

    “If doctors get behind “full disclosure” I think they would be doing themselves, and U.S. medicine, a world of good.”

    full disclousre would never work in the US with trial lawyers. How do you go into court and defend when the doctor has admitted he made a mistake. Even though the argument is about the damage the mistake did and not rather it happened, if you prescribe the wrong pill but the patient never takes it should they be compensated? A trial lawyer will argue mental distress, fear of taking a pill again, and all sorts of BS to get paid.

  12. Dr. Mike & Tim–

    I understand what you are saying. Physician fear of a lawsuit is quite separate from the odds that any individual doctor will be sued.

    The emotional cost of a lawsuit is incalculable. As Justice Brandeis said: there are two things to fear in life: death and litigation.

    This why I belive that we need to move away from an adversarial approach to malpractice to a “full disclosure” approach. Yes, we need better laws in many states to protect the “disclose, apologize and offer an early settlment” strategy, but in places where this has been done well (Michigan, for instance) it works.

    This does mean that hospitals and doctors s would have to admit that inevitably, they make mistakes. In many cases, more than one person drops the ball, and the hospital needs better systems to reduce the opportunity for errors.

    Patients who fall victim to a mistake should be fully compensated.
    But it would be much less costly for payors (insurers, hospitals) to settle quickly than to pay the very high administrative costs associated with suits that usually go on for years. Without those exorbitant administrative costs, payors could be more generous when it comes to compensating patients who suffer terrible injuries and still save a fortune. It’s a win-win.

    As for doctors, we need to get away from the “shame and blame” that would make you feeling like leaving town if your name were associated with a malpractice suit.

    I’d urge you to read Dr. Atul Gawande’s “Complications: A Surgeon’s Notes On an Imperfect Science.” He talks candidly, and with humility, about mistakes he has made as well as near-misses.

    If doctors get behind “full disclosure” I think they would be doing themselves, and U.S. medicine, a world of good.

    The only way to reduce mistake mistakes is full disclosure: that way doctors and hospitals can figure out how to reduce errors.

  13. “I, and hundreds of thousands of others like me, will continue to practice defensive (and unnecessarily expensive) medicine until the day you fundamentally change the system. (Economic caps are pointless, they change nothing)”

    Okay. I’ll buy it.
    All you say is obviously from a solidly honest place deep within your being.
    So what or how, in your opinion, is the remedy?
    How should the “system” be changed in a manner that will lead to better outcomes at lower per-patient costs?
    What about the system is changeable that would make you feel different?
    Is technology and progress advancing so rapidly that ongoing price increases are inevitable?
    I’m intrigued that you say economic caps change nothing. Have you any opinion about safe harbor courts?

  14. Nate–

    You’re mistaken.

    First, this is what a “closed claim” is: (As you can see, it can be a case that was settled, or a case that went to court.)

    “Professional Liability Insurance Report of Closed Claim

    ——————————————————————————–

    Instructions
    A claim is any demand for damages (whether or not for a specified amount, and whether or not a lawsuit has been filed) for personal injuries alleged to have been caused by error, omission or negligence in the performance of professional services, communicated orally or in writing to the reporting insurer or risk management organization.

    Pursuant to G.L. chapter 112 section 5C, Form PLICC must be filed with the Board within thirty (30) days after any of the following events:

    a final judgment
    a settlement, or
    a final disposition not resulting in payment on behalf of the insured
    For the purposes of determining the date that triggers this filing requirement, please use the following guidelines:

    Final judgment – the date of the judgment entered by a trial court. If the judgment is appealed and any information in the original report is no longer correct, a second form must be filed within thirty (30) days of the decision of the appeals court.
    Settlement – The earlier of:
    the date of the settlement agreement
    the date of the release and waiver signed with respect to the licensee reported on the form, or
    the date that the settlement agreement or other final document was filed with the trial court.”

    Secondly, a description of how the reserachers got the claims:

    “We investigated the merits and outcomes of malpractice litigation using structured retrospective reviews of 1452 closed claims. The reviews included independent assessments of whether the claim involved injury due to medical error. Our aim was to measure the prevalence, costs, outcomes, and distinguishing characteristics of claims that did not involve identifiable error.

    Methods
    Study Sites
    Five malpractice insurance companies in four regions of the United States (the Northeast, Mid-Atlantic, Southwest, and West) participated in the study. Collectively they covered approximately 33,000 physicians, 61 acute care hospitals (35 of them academic and 26 nonacademic), and 428 outpatient facilities. The study was approved by ethics review boards at the investigators’ institutions and at each review site (i.e., the insurer or insured entity).

    Claims Sample
    Data were extracted from random samples of closed-claim files at each insurance company. The claim file is the repository of information accumulated by the insurer during the life of a claim (see the Supplementary Appendix, available with the full text of this article at http://www.nejm.org). We also obtained the relevant medical records from insured institutions for all claims included in the sample.

    Following the methods used in previous studies, we defined a claim as a written demand for compensation for medical injury.15,16 Anticipated claims or queries that fell short of actual demands did not qualify. We focused on four clinical categories — obstetrics, surgery, missed or delayed diagnosis, and medication — and applied a uniform definition of each at all sites. These are key clinical areas of concern in research on patient safety; they are also areas of paramount importance to risk managers and liability insurers, accounting for approximately 80 percent of all claims in the United States and an even larger proportion of total indemnity costs.17-19

    Insurers contributed claims to the study sample in proportion to their annual volume of claims. The number of claims by site varied from 84 to 662 (median, 294). One site contributed obstetrics claims only; another site had claims in all categories except obstetrics; and the remaining three contributed claims from all four categories

    When an attorney refers to “brining a case” he is not talking about “filing the initial paper work.” Here is a statement from alawyers website:

    “Bringing a malpractice case can cost up to $100K. The lawyer has to front that money.”

    That $100 K assumes that the case does not go to court. Much of the cost is “discovery” . The average case in the study that I talk about above lasted 5 years. In t he study they talk about how mucch the average plaintiff received if they “settled” vs. if the won a verdict in court.

    Becasuse malpractice suits are so expensive, the number of suits has plunged over the past two decades. Award amounts have also fallen sharply.

    The investigators in the study (all physiicans) were etremely distrubed by the fact that 16% of plaintiffs who were seriously injured (or died) that was caused by medical negligence suffered through a 5-year case and received no compensation.

    If you want to know more, take a look at part 1 of the post –it should be up on http://www.healthbeatblog.org within the hour.

  15. Talking about the results of jury awards and the reasons for defensive medicine are two different topics. Doctors don’t study Harvard research about what juries did and did not get right; they practice so as to avoid the next lawsuit.

    I have intimate knowledge of many malpractice suits over many years. I can tell you that:

    Juries do indeed like doctors and are not easily duped. But this is irrelevant.

    Lawyers do not bring suits expecting to go to a jury. They play the settlement lottery. They do not spend millions of dollars on malpractice cases; they can spend very little to get to a settlement with a doctor who spends much more than they do for every hour spent on the case.

    In my experience, about 8 of 10 lawsuits filed against orthopedic surgeons have no merit. That means that out of 10 board certified orthopedists who look at that chart, 9 would say the suit had no merit. The plaintiff attorney finds the other 1.

    If doctors are reviewing charts of cases FILED in county courts, and finding most have merit, then they are… idiots. The cost of defensive medicine is America is huge. The studies are simply not measuring it.

  16. “The problem with your comment is that you cannot become rich in America working for a salary”

    “For an orthopedic surgeon, it might be working with a device manufacturer to develop a more effective or longer lasting device on which he can then earn royalties. For an oncologist, it might mean working with a biotech company on the development of new cancer treatments in exchange for stock options or stock awards.”

    Yea Barry, orthopedic surgeons and oncologists must suffer with low salaries longing for the day they strike it “rich” with a device or biotech company. What this country needs to solve health care is more rich participants.

  17. ” in which doctor reviewed the files of closed malpratice cases,”

    Closed cases from where? Cases filed in court which renders everything you said after this pointless, or cases consulted with an attorney? I would be curious how they reviewed or obtained cases not filed with the courts as insurance companies and defence attorneys try to keep these settlements from being public knowledge.

    You probably have no idea why this makes a difference but it makes all the difference in the world. 10 to 1 they only reviewed court cases.

    “Bringing a malpractice case is very expensive,”

    BS it is. It cost a couple hours and few hundred dollars to start a case, only if it goes to trial does it get expensive, again if you don’t know the difference you shouldn’t be running on about it.

    ” unless he thinks it is a very good case.”

    You obviously have no idea what your talking about. Or unless he thinks he can get a quick settlement. Doctors can’t afford to have their name in the paper as subject to a suit, not to mention the stress. Insurance companies only care about the quickest solution, on multiple occasions our E&O, professional malpratice, has paid bogus claims becuase it was less then our deductible, in fact it cost them nothing to settle but stuck us with the bill. If they can pay $20,000 and be done with it that wont even get their attorney’s out of bed. The problem isn’t the handful of cases that go to court, its the tens of thousands that don’t.

    “The physicians examining the cases thought that the doctor or hospital was negligent in more than 16 percent of the cases where the jury found in the doctor’s favor and the plaintiff received no compensation.”

    This is going to blow your mind but that actually sounds low to me. The fact you think this supports your argument shows how little you know. If a doctor is treating a dieing person and cuts open something by accident yes they made a mistake but unless it changed the outcome or caused greater damage there is no actionable tort. With our aggresive medicine I’m surprised only 16% got off, that tells me doctors are being held to a god standard.

  18. Barry–

    A year after Gawande wrote that New Yorker piece, he was involved in a study done by Harvard’s School of PUblic health in which doctor reviewed the files of closed malpratice cases, and decided whether the patient had indeed been injured, and whether the injury was casused by medical erroir.

    They concluded that there were very, very few frivolous cases. In the vast majority of cases, the patient had died or been seriously injured. Bringing a malpractice case is very expensive, so an attorney isn’t going to sink six year of his life into it (the average length of time from inijury to conclusion of hte case) and the money needed to discovery, experet witnesses, etc., unless he thinks it is a very good case.

    The physician-reviewers found few frivolous cases, and they found that rather than sympathizing with plaintiffs, juries tend to assume the doctor knew what he was doing. The physicians examining the cases thought that the doctor or hospital was negligent in more than 16 percent of the cases where the jury found in the doctor’s favor and the plaintiff received no compensation.

    Other studies point out that when a judge (rather than a jury) decides the case, he is likely to be much tougher on the doctor and/or hospital.

    Finally, they point out that onlyl about 2 percent of the patient who are sesriously injured by malpractice sue. The chances of a doctor being sued are much lower than manhy physicians think.

  19. Craig –

    Thanks for your comment. Perhaps you could estimate for us what percentage of the total cost of the medical services, tests, procedures and drugs you recommend or prescribe would you classify as defensive medicine. I’m always interested in the real world perspective of practicing doctors. When I asked my NYC cardiologist that question recently, he estimated that for his practice and all the other practices in the area that he’s familiar with, about 15% of the cost of medical decisions and recommendations constitute defensive medicine. Satisfying patient expectations may be part of it as well, but his best estimate is that 15% of the cost of the healthcare utilization that results from his medical decisions, referrals and prescriptions are defensive at their core.

  20. My “lieing eyes” tell me that the “facts” presented in this discussion are essentially correct, but the meaning of those facts are and forever will be lost on me. I think about malpractice every day, with almost every single patient. Every decision about whether or not to order a test is made in light of the malpractice risk of that decision. Standard of care be dammned, if ordering or not ordering places me at risk (what I perceive to be risk) then I will make the decision in the way that reduces that risk. Arguing about whether or not the current malpractice system gives out its “rewards” appropriately is completely irrelevant. I don’t want to be sued, ever. I don’t don’t care about the money – I have insurance for that. $Million? Who cares, won’t come out of my pocket. I just never, ever want to go through that process, or to even have my name in the paper as having been named in a suit, even if I am eventually dropped. I would consider leaving town if that happened. If anyone reading this doesn’t understand how visceral is a physician’s fear of this process then that reader is an idiot. Citing facts and statistics will never make this current system acceptable (not that the claim was ever made in the comments above, but the implication was “oh, it’s not that bad”) It is that bad. In my gut it is that bad. You can’t change that with facts. I, and hundreds of thousands of others like me, will continue to practice defensive (and unnecessarily espensive) medicine until the day you fundamentally change the system. (Economic caps are pointless, they change nothing)

  21. You just don’t get it Craig,

    What you and other praticing doctors actully experience is anecdotal, a small step above not being real at all. Now a study posted on the internet by academics who have never worked an honest day in the field or a poll funded by an organization pushing a political agenda, now thats real, thats science.

    You need to stop believing your lieing eyes and get on booard with the “Facts” she has the internet reserach to prove it and the hours, yes hours, invested to find them.

    Who are we to question a Journalist? On the royality scale they are right there with politicians at the top, now fall in line.

  22. @Ms. Mahar,

    This thread is very strange. Trying to deny the costs of defensive medicine is, to me, like trying to deny the sky is blue. You can come up with all the “facts” and studies you want, but the sky is still blue.

    Defensive medicine pervaded my medical education entirely, literally from the first day of medical school. A dean warned us that every patient we see is a potential plaintiff, and to treat them accordingly. Fortunately, I was taught to compartmentalize in my mind what was really necessary, and what was just defensive. The cost is quite impressive, actually. It is unfortunate that the defensive medicine modus operandi is pervasive in medical decision making. Trying to separate out real medicine from the defensive is difficult for many physicians, let alone lay people.

    However, denying the huge expense of defensive medicine does not help anybody, particularly if one is trying to control costs.

  23. “Our health care system is much more dangerous than systems in other developed countries.;”

    Whats next Maggie are you going to start citing High School Year book polls? A subjective poll across borders in disparet systems….wow that has about as much scientific value as throwing darts. I’m curious given the wring medicine is that based on future medical findings or what they were told on TV? I also seem to remember people saying adnasuem how we receive more care, test, and drugs then other countries, I don’t see where this study accounts for that, if they did an error rate per 1000 test for example I might start being interested. This is just another propoganda piece from the hacks at commonwealth.

  24. Maggie –

    Actually, I googled and read Dr. Gawande’s article titled “The Malpractice Mess” he published in The New Yorker Magazine in November, 2005. He highlights everything wrong with the medical tort system from its adversarial nature to the lengthy process it takes to bring a case to a resolution. There is no doubt that some patients are harmed by medical errors from a missed diagnosis to a mistake during surgery. There are also a huge number of cases that lawyers don’t take because either no harm was done or the potential payoff for the lawyer isn’t sufficient to cover the expenses necessary to pursue the case. I think that phenomenon is an illustration of our “sue happy” culture in the U.S. exemplified by the person who was annoyed that he had to wait four hours in the ER before receiving (proper) treatment.

    I found it interesting that the system we have to compensate people injured by adverse side effects from vaccines adds about 15% to the cost of vaccines. Gawande suggested that such a system probably wouldn’t work for healthcare generally.

    While it’s impossible to prove definitively, I suspect that if we superimposed the U.S. medical tort system, U.S. patient expectations, and our inclination to sue or at least consult a lawyer when there is a bad outcome on other countries, their healthcare systems would be considerably more expensive than they are. They would probably still be less expensive due, in part, to lower prices per service, test, procedure or drug.

  25. Barry–

    I’m a little disappointed. Saying that we could “go back and forth” on this subject— rather than responding to the evidence I have offered–seems a bit of a cop-out.

    Out of respect for your intelligence, and your willingness to grapple with ideas, I spent quite a bit of time responding to your comment on malpractice–doing research and thinking about the problem. I assumed that you would think about the evidence I offered, rather than just blowing it off (or ignoring it.) Also,I find that when I respond to readers who are interested in the facts, I, too, always learn something.

    Meanwhile, as I responded to your comment , at a certain point I realized that I was writing a post. So I have spent the last few hours turning it into a post for HealthBeat (www.healthbeatblog.org). It should be up tomorrow.

    Here, let me just say that Europe’s experience with Health Courts will surprise you.

    And while the doctors you talk to see malpractice suits as an unfarir threat, many practicing doctors who have written articles in peer-reviewed journals are more concerned about the amount of malpractice (medical errors) in this country. Our health care system is much more dangerous than systems in other developed countries.;

    From Health Affairs:”One-third of patients with health problems in the U.S. report experiencing medical, medication, or test errors, the highest rate of any nation in a new Commonwealth Fund international survey. Assessing health care access, safety, and care coordination in Australia, Canada, Germany, New Zealand, the United Kingdom, and the United States, the survey found that . . . , the U.S. stood out for high error rates, inefficient and lack of coordination of care.” http://www.commonwealthfund.org/Content/News/News-Releases/2005/Nov/International-Survey–U-S–Leads-in-Medical-Errors.aspx.

    We have more malpractice suits, in part, because we have more malpractice.

    Finally, no doubt you and I talk to different doctors. And certainly, doctors disagree on this issue. But I’m more impressed by those who actually look at the research on medical mistakes and malpractice.

  26. Maggie –

    We could probably argue back and forth on defensive medicine for a long time. It would probably be helpful if some of the doctors weighed in on this. In particular, I would like to hear from rbaer since he has also worked in Germany and France, I think.

    Doctors tell me that defensive medicine pervades the medical culture in the U.S. It gets factored into the evolution of practice patterns that become the local community standard to which most doctors adhere. They suffer no financial consequences for doing too much rather than too little and they often benefit financially from doing more rather than less. This is especially true for diagnostic testing in order to protect against failure to diagnose suits, and most of the tests are not painful or invasive which makes them even easier to justify.

    Some blame the fee for service payment model for part of this. However, doctors in most other developed countries are also paid on a fee for service basis. Defensive medicine is not nearly as significant an issue in Western Europe and Canada as it is in the U.S. and it’s even less so in Japan. Maybe some of it has to do with differences in culture and patient expectations.

    In our culture, I can easily understand why doctors can come to see every patient as a potential plaintiff. It doesn’t matter how many patients don’t sue when they are harmed or how often doctors prevail in court. Enough of them sue when there is a bad outcome but no malpractice to influence practice patterns in the direction of doing more rather than less in order to stay out of court at all costs. If we had health courts instead of juries deciding these cases and a loser pays rule like they have in the UK, I think we would have far fewer lawsuits and, eventually, less defensive medicine.

  27. Barry-

    “You write: “What drives physicians to practice defensive medicine is the total lack of objectivity, fairness and consistency both across jurisdictions and even within a jurisdiction as how medical disputes are decided. Juries of lay people who cannot understand the often conflicting scientific claims in these cases can be easily swayed by emotion and sympathy for injured plaintiffs”

    These are assertions, without evidence.– what I would call fictions.
    Here are the facts (from a JAMA article)

    “Over the years, our understanding of medical malpractice has been plagued by a number of myths, many of which have been exposed by a remarkable series of reports from two groups.1-3 As a result of these reports, and contrary to popular belief, we know that adverse events due to negligent practice rarely result in a lawsuit (only 2% of such events lead to malpractice claims),1 juries are not systematically biased against physicians (malpractice defendants win more than two thirds of cases, a better record than defendants in other kinds of personal injury cases),2,4 and juries decide cases on the basis of the physician’s quality of care rather than the patient’s severity of injury.2”

    “In this issue, Burstin et al 3 expose another persistent myth about medical malpractice. It is commonly believed that poor patients are more likely than wealthier patients to bring suits.”

    You’ll note all of the footnotes– citing reserach which backs up what the authors are saying.

    Regarding the poor, another JAMA article desccribes a study looking at 51 hospitals in New York State which concluded: ” Poor and uninsured patients are significantly less likely to sue for malpractice, even after controlling for the presence of medical injury. Fear of malpractice risk should not be a significant factor in the decision to serve the poor. Tort reforms that would protect physicians who serve the medically indigent from malpractice suits may not be warranted.”

    Conservatives who argue for tort reform have spread the myth that the poor are more likely to sue, and have suggested that, for that reason, doctors who are kind enough to treat poor patients shoudl be exempt from malpractice suits. (Which would mean that the poor are stripped of their legal rights for compensation, simply because they are poor.”

    The phrase “the poor aren’t shy about suing” troubled me because it suggests that they should be shy— or shyer about suing than other people.–presumably because they should be grateful that a doctor is willing to try to treat them (which suggests that thte poor don’t have the same “right” to healthcare as everyone else. )

    I believe that this may not have been what you were thinking–you may simply have been echoing a phrase that you have heard others use.. But if you think about it, it’s quite different from simply saying: “The poor are as likely to sue as anyone else.
    And, in fact, the truth is that “The poor are much less likely to sue.”

    As you know, I too would like to see “a dispute resolution system presided over by judges with specialized knowledge and the power to hire neutral experts to help them sort through conflicting scientific claims..’
    But I would point out that there is no such thing as a completely “netural” expert and in many cases Ithere is no clear “right” answer as to whether the doctor or hospital committed an error.
    For example, in some of the most painful cases, an infant of mother has died during childbirth. There may well be legitimate differences of opinion as to whether under those particular circumsgtancese, the doctor should or shouldn’t have performed a C-section. (Sometimes the C-section is more dangerous; sometimes it is less dangerous. Hindsight is always easier than making the decision at the time.
    Then there are the cases where back surgery makes the back pain worse. Should the doctor have recommended surgery? In many cases, back surgeons would disagree with each other. (See what I say at the end of this comment about how doctors who reviewed malpractice cases were confident in their judgment less than half of the time.)

    Medicine is not cut and dried. As Dr. Atul Gawande writes in his book Complications (which I urge you to read), lay people do not appreciate the “ambiguities” of medicine.

    Cerebal Palsy is a good example. Nate asserts that “the link between doctor error and cerebral palsy is questionable, at best.”
    Iin fact, medical reserarch reveals that there are many possible causes of cerebral palsy–including what happened just prior to and during birth.
    A very recent story in the LA Times points out that “r, a study published Thursday suggests that general improvements in the care of infants just before, during and after delivery are making a difference. Researchers in the Netherlands studied almost 3,000 infants born prematurely between 1990 and 2005. Cerebral palsy rates declined 6.5% from the start of that period compared with the years from 2002-05. The study also found a decrease in the severity of cases, . . Various strategies have been tested to lower cerebral palsy rates, such as Cesarean section delivery, fetal monitoring and various medications, such as antibiotics and corticosteroids. Still, it’s not clear why the prevalence of white matter lesions that cause cerebral palsy is falling, said an author of the study, Linda de Vries, of the University Medical Center Utrecht. It seems that overall care of infants is just better.

    “There is not really a single factor we can point out,” De Vries said. “It is more general improved perinatal care”

    So it seems that what doctors do can reduce cases of cerebal palsy. We know, for instance, that late birth (days after the due-date) can be a cuase of cerebral palsy. The question then is: should the doctor have performed a C-section or induced labor sooner? In a recent case where the mothers” amniotic fluid had dropped by half and her physician waited days to perform a Caesarian section,” the jury found in favor of the parents.” Were they wrong?
    It’s just not clear.

    WE do know that many cases of CP are NOT caused by physician error.f
    The cause may be genetic, or it may be connected to an infection the mother contracted long before deliver.

    Last year, JAMA published an article which said that , following a long study of kids with CP, ” the investigators said, only 19.9% of a population with cerebral palsy, might be considered on the basis of MRI scans as having some type of obstetric mishap as the cause of their brain damage.”

    “Reviewing the possibilities for prevention, the investigators suggested that more attention be paid to the importance of infections during pregnancy and that despite legitimate concern about overprescription of antibiotics, there should be no question about treating infections during pregnancy. ”

    Given what we now know, is an OB-GYN guilty of malpractice if he tells a pregant women not to take antibiotics to treat an infection, and the baby is born with CP? It’s unclear. If standards for best practice said that the pregnant woman shoud take antibiotics, then perhaps the doctor woudl be vulnerable to a lawsuit. But again, it’s not clear.

    This brings us back to the Harvard study where physicians reviewed malpractice cases and decided, in retropsect if the physician had committed an error.

    tBarry-

    “You write: “What drives physicians to practice defensive medicine is the total lack of objectivity, fairness and consistency both across jurisdictions and even within a jurisdiction as how medical disputes are decided. Juries of lay people who cannot understand the often conflicting scientific claims in these cases can be easily swayed by emotion and sympathy for injured plaintiffs”

    These are assertions, without evidence.– what I would call fictions.
    Here are the facts (from a JAMA article)

    “Over the years, our understanding of medical malpractice has been plagued by a number of myths, many of which have been exposed by a remarkable series of reports from two groups.1-3 As a result of these reports, and contrary to popular belief, we know that adverse events due to negligent practice rarely result in a lawsuit (only 2% of such events lead to malpractice claims),1 juries are not systematically biased against physicians (malpractice defendants win more than two thirds of cases, a better record than defendants in other kinds of personal injury cases),2,4 and juries decide cases on the basis of the physician’s quality of care rather than the patient’s severity of injury.2”

    “In this issue, Burstin et al 3 expose another persistent myth about medical malpractice. It is commonly believed that poor patients are more likely than wealthier patients to bring suits.”

    You’ll note all of the footnotes– citing reserach which backs up what the authors are saying.

    Regarding the poor, another JAMA article desccribes a study looking at 51 hospitals in New York State which concluded: ” Poor and uninsured patients are significantly less likely to sue for malpractice, even after controlling for the presence of medical injury. Fear of malpractice risk should not be a significant factor in the decision to serve the poor. Tort reforms that would protect physicians who serve the medically indigent from malpractice suits may not be warranted.”

    Conservatives who argue for tort reform have spread the myth that the poor are more likely to sue, and have suggested that, for that reason, doctors who are kind enough to treat poor patients shoudl be exempt from malpractice suits. (Which would mean that the poor are stripped of their legal rights for compensation, simply because they are poor.”

    The phrase “the poor aren’t shy about suing” troubled me because it suggests that they should be shy— or shyer about suing than other people.–presumably because they should be grateful that a doctor is willing to try to treat them (which suggests that thte poor don’t have the same “right” to healthcare as everyone else. )

    I believe that this may not have been what you were thinking–you may simply have been echoing a phrase that you have heard others use.. But if you think about it, it’s quite different from simply saying: “The poor are as likely to sue as anyone else.
    And, in fact, the truth is thath “The poor are much less likely to sue.”

    As you know, I too would like to see “a dispute resolution system presided over by judges with specialized knowledge and the power to hire neutral experts to help them sort through conflicting scientific claims..’
    But I would point out that there is no such thing as a completely “netural” expert and in many cases Ithere is no clear “right” answer as to whether the doctor or hospital committed an error.
    For example, in some of the most painful cases, an infant of mother has died during childbirth. There may well be legitimate differences of opinion as to whether under those particular circumsgtancese, the doctor should or shouldn’t have performed a C-section. (Sometimes the C-section is more dangerous; sometimes it is less dangerous. Hindsight is always easier than making the decision at the time.
    Then there are the cases where back surgery makes the back pain worse. Should the doctor have recommended surgery? In many cases, back surgeons would disagree with each other.

    Medicine is not cut and dried. As Dr. Atul Gawande writes in his book Complications (which I urge you to read), lay people do not appreciate the “ambiguities” of medicine.

    Cerebal Palsy is a good example. Nate asserts that “the link between doctor error and cerebral palsy is questionable, at best.”
    Iin fact, medical reserarch reveals that there are many possible causes of cerebral palsy–including what happened just prior to and during birth.
    A very recent story in the LA Times points out that “r, a study published Thursday suggests that general improvements in the care of infants just before, during and after delivery are making a difference. Researchers in the Netherlands studied almost 3,000 infants born prematurely between 1990 and 2005. Cerebral palsy rates declined 6.5% from the start of that period compared with the years from 2002-05. The study also found a decrease in the severity of cases, . . Various strategies have been tested to lower cerebral palsy rates, such as Cesarean section delivery, fetal monitoring and various medications, such as antibiotics and corticosteroids. Still, it’s not clear why the prevalence of white matter lesions that cause cerebral palsy is falling, said an author of the study, Linda de Vries, of the University Medical Center Utrecht. It seems that overall care of infants is just better.

    “There is not really a single factor we can point out,” De Vries said. “It is more general improved perinatal care”

    So it seems that what doctors do can reduce cases of cerebal palsy. We know, for instance, that late birth (days after the due-date) can be a cuase of cerebral palsy. The question then is: should the doctor have performed a C-section or induced labor sooner? In a recent case where the mothers” amniotic fluid had dropped by half and her physician waited days to perform a Caesarian section,” the jury found in favor of the parents.” Were they wrong?
    It’s just not clear.

    WE do know that many cases of CP are NOT caused by physician error.f
    The cause may be genetic, or it may be connected to an infection the mother contracted long before deliver.

    Last year, JAMA published an article which said that , following a long study of kids with CP, ” the investigators said, only 19.9% of a population with cerebral palsy, might be considered on the basis of MRI scans as having some type of obstetric mishap as the cause of their brain damage.”

    “Reviewing the possibilities for prevention, the investigators suggested that more attention be paid to the importance of infections during pregnancy and that despite legitimate concern about overprescription of antibiotics, there should be no question about treating infections during pregnancy. ”

    Given what we now know, is an OB-GYN guilty of malpractice if he tells a pregant women not to take antibiotics to treat an infection, and the baby is born with CP? It’s unclear. If standards for best practice said that the pregnant woman shoud take antibiotics, then perhaps the doctor woudl be vulnerable to a lawsuit. Again, it’s not clear.

    This brings us back to the Harvard study where physicians reviewed malpractice cases and decided, in retrospect ,whether the doctor had committed an error. The physicians were asked to Reviewers recorded their judgments
    using a 6-point confidence scale in which a score
    of 1 indicated little or no evidence that an adverse
    outcome resulted from one or more errors
    and a score of 6 indicated virtually certain evidence
    that an adverse outcome resulted from one
    or more errors. Claims that received a score of
    4 (“more likely than not that adverse outcome resulted
    from error or errors; more than 50–50 but
    a close ca] ll”) or higher were classified as involving
    an error.”

    Often, the physician-reviewers just weren’t sure.
    Reviewers had a high level of confidence in the determination
    of error in [just] 44 percent of claims (those
    receiving scores of 1 or 6) and a moderate level of
    confidence in 30 percent (those receiving scores
    of 2 or 5); the remaining 23 percent were deemed
    “close calls” (Fig. 2).
    The fact that the reveiwers were not at all sure in 23 percenet of the cases show how difficult it is even for an expert to decide whether an error was made.

    This explains why plaintiff’s were sometimes compensated in cases where the physician reviewer said there was an error (sometimes with only moderate confidence, sometimes feeling it was a “close call.”) (And note the physician reviewers were experts in their fields: OB-Gyn’s reviewed the OB-Gyn cases, etc.

    Whatever system you use — including one with so-called “neutral” experts, if you asked an equally object panel to review the cases, probably they would be unsure roughly 25% of the time, and say that had strong confidence in their judgment less than half of the time.

    This is because of the amibguities and uncertainties of medicine. And this is why there will always be compensation in some cases where no error was made. It doesn’t matter what system you use.

    Finally, and this is telling: “Plaintiffs were paid in cases where the reviewers found no error onlyl 10 percen tof the time. Plaintiffs were NOT PAID in cases where the reviewer found that there Was error 16 percent of the time..
    “Thus, nonpayment of claims with merit occurred
    more frequently than did payment of claims that
    were not associated with errors or injuries”

    (Barry please read the article. It’s very good. You’ll find it by Googling Gawande and NEJM and malpractice and 2006.)

    Iin other words, juries erred in the direction of siding with the doctor.
    Moreover, one could argue that if though the reviewers were trying very hard to be objective, they woudl be llkely to be very sympathetic to the doctor in their specialty. . . . So perhaps one could argue that identifying with the doctor skewed their judgment 5% of hte time? 7% of the time? 3% of the time?

    What’s certain is that the myths I name at the beginning of this comment are myths– they greatly simplify a very complicated issue. Adn what is also certain, from the Harvard School of Public Health article is that the administrative costs of malpractice suits are huge. There has to be a better way.
    I still agree with those hospitals that have shown that full disclosure and saying “we’re sorry” is by far the best way to cut the costs—and the pain for everyone involved.

  28. Margalit –

    I hear you. I’m glad we’re in agreement on the drug and device manufacturers including the idea that payers shouldn’t pay for products that cost more than they’re worth or society can afford based, hopefully, on some reasonably objective standard.

    On providers who come in direct contact with patients, I appreciate your argument but I’m not completely uncomfortable with profit making even here. However, I think it’s important to provide patients and referring doctors with maximum price and quality transparency data so decisions about both treatment selection and provider selection can be as informed as possible. Surgical procedures and cancer treatments lend themselves better to risk adjusted outcomes measurement than, say, managing CHF. Information on patient safety metrics like hospital infection rates would also be helpful.

    Finally, I would like to add just one more thought on medical malpractice. If we had a more objective system of dispute resolution like health courts that was widely perceived as fair and objective by doctors, it should be easier to effectively discipline the relatively small number of doctors who account for a disproportionate share of malpractice awards within a given specialty.

  29. Barry,
    Hope you had a nice trip….
    If you notice, I was limiting my discussion to direct care delivery (physicians, hospitals, long term facilities). I have no problem with drug and device manufacturers being investor backed, shareholder supported, blatantly for profit entities. I actually prefer it that way, exactly for the reasons you mentioned. We have quite a few means to regulate and restrain abuse from those quarters. Unfortunately we seem to be reluctant to use them in full.
    I am not looking for a top down, centralized health care system. Quite the opposite. I don’t want government deciding what drugs and devices should be developed. As a major payer, government can decide which ones it will buy and bargain hard on the price. The market will adjust and create what is valuable and what sells.

    When it comes to those that actually lay hands on patients, there should be nothing but the best interest of the patient on their mind. There is no other circumstance in nature where a sentient being, of its own accord, agrees to lay down naked on a table and allow others to knock him out cold and inflict what could be mortal wounds on their body, or pump poisonous chemicals into their veins. You must have an incredible amount of trust in those masked strangers, wielding sharp instruments, for that to happen. There is no room here for murky allegiances to corporate and Wall Street.

  30. Maggie –

    You sometimes read things into my comments that simply aren’t there. I never said that poor people are more likely to sue in the event of a bad outcome than middle class or upper income people. I said that they are not shy about suing. I didn’t speak specifically to how often they sue or how their number of suits compares to people on any other part of the income spectrum.

    Moreover, as Nate says, for cases where no error was found to occur, why should there be any grounds for compensation at all even if the doctor was arrogant? If he did everything right from a medical standpoint and there was still an unfortunate outcome, how can a malpractice suit be justified? If you want to argue for some sort of no-fault system where everyone who has a bad outcome is compensated whether the doctor did anything wrong or not, argue for it, but it would be incredibly expensive.

    Finally, the majority of these cases are settled before they ever go to trial. Sometimes, insurers insist on settling non-meritorious cases if they can be settled for less than a potential verdict that is quite possible in certain jurisdictions that are known to be particularly plaintiff friendly. Also, as I said before, even when the doctor wins and there is no award at all, the case can drag on for years before it reaches a conclusion. The stress alone can affect physician behavior when it comes to ordering diagnostic tests.

    If I were a doctor, I would feel much more confident if there were a dispute resolution system presided over by judges with specialized knowledge and the power to hire neutral experts to help them sort through conflicting scientific claims. I wouldn’t want a jury anywhere near the case. If I saw similar cases decided similarly over time both within and across jurisdictions, it would inspire confidence that any dispute that I became involved in would be handled objectively and fairly. That isn’t the case under the current system and it affects practice patterns. I don’t understand why you and the researchers that you cite can’t appreciate that.

  31. John –

    I’ve said many times that I strongly support safe harbor protection from lawsuits for doctors who follow evidence based guidelines where they exist and that special health courts should handle dispute resolution instead of juries.

  32. Margalit –

    I’m back from out of town. I think our disagreement about what constitutes a business is more a matter of semantics than anything else. People who provide personal services to the public either practicing solo or in small groups are running businesses in my opinion. I don’t care whether they’re doctors, lawyers, hair stylists, personal trainers or consultants. They need to be paid a fair fee for their services in order to cover their overhead and earn a decent living. For large corporations, they need to earn enough to cover their cost of capital after meeting all expenses if they are to sustain their business model.

    When it comes to for profit businesses, experts tell me that CMS thinks the most egregious examples of profiteering are the home healthcare agencies and the skilled nursing facilities. Roughly 85% of hospital beds are part of non-profit organizations but that doesn’t stop them from pricing their services as aggressively as the for profit hospitals. Indeed, that’s where the most severe cost pressure on the system is coming from.

    The anti-profit contingent likes to beat up on the drug and device manufacturers which account for about 15% of healthcare costs combined. The issue for me regarding drug and device manufacturers is what’s the alternative? Should the NIH, in partnership with academic medical centers, conduct all drug and device research with taxpayer dollars? Then, if they develop something promising, they can hire a contract research organization to take it through clinical trials. If it ultimately wins FDA approval, it can contract with a drug company to handle sales and marketing for which it would pay appropriately but not excessively. If the NIH were expected to at least break even on the overall enterprise after factoring in the cost of the many probable failures, how much innovation would we get compared to what we have now and how much less would we pay? I have no idea and neither does anyone else. My guess is that we would have significantly less innovation than under the current system.

  33. Are you being serious Margalit?

    St. Judes
    Shriners
    Sisters of Mercy
    Catholic Healthcare West
    Catholic Helathcare Partners
    Susan Kohman/Race for the Cure

    Those are big ones off the top of my head.

  34. “What about a non-profit corporation?

    Charities are business and plenty of them never make a penny nor pay management.”

    Nate, would you please list some of those health care “charities” of any size or significance?

  35. “The notion that juries awsard “multi-milion-dollar awards” when the doctor
    has made no error is an urban mtyh.”

    Maggie, John Edwards career alone disproves this. The link between doctor error and cerebral palsy is questionable at best. There have been countless number of these suits with no provable doctor error that resulted in multi million dollar judgements. There is cleary a hidtory of judgement based on outcome not malpratoice. Doctors do lose cases based on hindsight.

    “In 97% of claims, the patient was hurt.”

    WHat does this mean though? If someone is brought in with multiple gun shot wounds and in the rush to stop them from bleeding to death they nick an organ and cause damage yes the person was hurt, are we going to hold doctors liable for this? Just becuase a person was hurt doesn’t mean the doctor did something wrong.

    ” “Non-error claims were also much less likely to result in compensation,”

    ” In addition, when non-error
    claims were paid, compensation was significantly
    lower on average ($313,205 vs. $521,560, P = 0.004)”

    This supports my argument, if there was no error then why was there compensation? Malpratice is based to much on outcomes not actions, a doctor can do nothing wrong and still pay on average $313,205, how can this be justified?

    “The notion that juries awsard “multi-milion-dollar awards” when the doctor
    has made no error is an urban mtyh. Only 9% of these claims result in an award from the jruy and in those case the award is much lower, averaging only $313,200″

    Are you claiming not one of those 9% was over 1.9 million? Urban myth implies it is not true then you all but admit it is. Clearly there are such awards or there wouoldn’t be an average of 300K.

    “And research shows that when docs who made no error are sued, it is becuase the patient and /or relatives viewed them as “arrogant,” ” uncaring” or “unwilling to communicate” from the very beginnning.”

    ???? How does this justify a malpratice lawsuit, the law requires there be malpratice to file a suit and here your admitting people knowingly file bogis claims as vendictive actions, this is called abuse of process and is illegal, are they ever held accountable, of course not, in fact 9% of the time they actually get paid for the bogus lawsuit per your statistics.

    “you attempt to confuse the entire issue by ignoring the fact that when when Angell & I refer to corporations or businesses focused on “growth” we are, of course, referring to for-profit businesses.”

    Its this type of argument that leads people to COUNTER attack you so vigorisouly. I don’t attempt to confuse anything, any honest person reading Lynn’s, who’s Angell?, question and your answer would not see any limiting of the argument to for profit business. You got caught in a hyperbolic statement and instead of just correcting youeself or saying what you meant you attach accusing me of trying to confuse the matter, just like you accused me of being sexist in the past when I out argued you. Just like you constantly call people racist who have stronger arguments you can’t answer.

    If thats the best you can do then so be it.

    “And we are not referring to companies offering health care to their workers. We are talking about the companies who feed at the trough of for-profit healthcare,”

    Really Maggie? Lynn/Angell doesn’t seem to be talking about the same companies;

    “Medicine has become a business. It is no longer a profession. Now it needs to run like a business. If physicians are employees they need to be compensated as an employee. As an economist that means their salary must be less than equal to the marginal revenue they contribute to the firm.”

    “Whenever a liberal raises the issue of racism, a conservative pops up and tries to turn ithe argument around,”

    When ever a liberal blanket labels everyone racist. Remember Maggie you have a terrible problem of labeling those that disagree with you racist or sexist in every post you make. In your writing everyone that disagrees with you is racist and sexist, you make the boy that cired wolf look like a reasnably concerned waytchmen. You see racism and sexism everywhere….your opponents are.

    It sounds like it has nothing to do with race and everything to do with prefering a rural life over big city, how are these people all racist for not wanting to live in the city?

  36. Excuse me, Ms Mahar, but I have minimally commented here since your last piece was posted in April, as I am tired of the same lame rhetoric of the usual suspects, including yourself, who do have the agenda of taking over health care for political party and possible other economic agendas, and frankly, your efforts to deflect and minimize what readers like I interpret your positions on topics as not benefitting providers will not go unspoken. Plus the fact that I did note I agreed with your above comment, so is that going to be swept under the rug without some acknowledgment?

    As to other physician readers who read and comment here, am I really off base as John Ballard claims about my interpretation of Ms Mahar’s writings?

    A simple “yes” that agrees with Mr Ballard or “no” that agrees with me would be appreciated. I note this is just others’ interpretations, not pure statements of fact, but, I know in my heart Ms Mahar is not looking out for providers in her quest to support the dissolution of health care as it was meant to be and continue to do more good than bad.

    By the way, Ms Mahar, you did not comment about the link per the damage that electronic records will have on privacy. As I always ask, is the silence validation of the reader’s point or challenge?

  37. Nate–

    You write: “There have also been verdicts where there was no error and the doctors still lost multimillion dollar lawsuits.”

    If you read the Harvard study done by physicians you would find that In “only 3 percnent of the claims no adverse outcome from medical care was evident.”
    Note– these are just claims, not caees where the patient won an award or settlement. In other words, there are very few “frivolous suits.”

    In 97% of claims, the patient was hurt. Indeed, the study reppors s that “these claims involved physicalinjury, which was typically severe. Eighty percent
    of claims involved injuries that caused significant or major disability . . . or death.”

    As to the size of awards: “Non-error claims were also
    much less likely to result in compensation, whether
    they were resolved out of court (34 percent vs.
    77 percent, P<0.001) or by verdict (9 percent vs.
    43 percent, P<0.001). In addition, when non-error
    claims were paid, compensation was significantly
    lower on average ($313,205 vs. $521,560, P = 0.004)

    The notion that juries awsard "multi-milion-dollar awards" when the doctor
    has made no error is an urban mtyh. Only 9% of these claims result in an award from the jruy and in those case the award is much lower, averaging only $313,200

    And research shows that when docs who made no error are sued, it is becuase the patient and /or relatives viewed them as "arrogant," " uncaring" or "unwilling to communicate" from the very beginnning. The patient didnt't trust the doctor. When patients do trust heir doctor (which most do),, few sue. In fact, 95% of patients who have been hurt by medical care never sue. (See Harvard study).

    Nate, in the rest of your comments , you attempt to confuse the entire issue by ignoring the fact that when Angell & I refer to corporations or businesses focused on "growth" we are, of course, referring to for-profit businesses.

    And we are not referring to companies offering health care to their workers. We are talking about the companies who feed at the trough of for-profit healthcare, making double digit profits. See http://voices.washingtonpost.com/ezra-klein/2011/02/health-insurance_industry_stil.html

    Some non-profit hospitals and even some physicans also see themselves as
    "businesses" focused on growing profits and revenues. (Though I believe that the majority of doctors still think of themselvs s as "professionals" who, by definition, put their patients' interests ahead of their own financial interests.)

    Finally, re: "racism": Whenever a liberal raises the issue of racism, a conservative pops up and tries to turn ithe argument around, suggesting that simply by raising the issue , the liberal ihas demonstrated that he or she is a "racist."

    This is a tired and lame argument. Racism exists. And it should be called out–just like anti-semitism, homophobia, etc.– whenever it rears its ugly face (arse?)

    The truth is that in more affluent urban areas, the majority of patients who receive most of their care in an ER are minorities. Unfortunately, these are also the areas where specialists are most reluctant to come in after hours and treat patients in an ER.

    In poor rural areas, the majority of poor patients in an ER are white. There are also the areas that tend to attract doctors who are willing to serve these patients , and don't think of them as "those people." (This is why they choose to practice in poor rural areas. Research shows that docs willing to practice in these areas often grew up in low-income rural families).

  38. As a result of these and other cases, insurance rates for doctors have skyrocketed — putting some out of business and driving others away, especially from rural areas. And doctors who have lost cases to Mr. Edwards have been bankrupted.
    Patients, meanwhile, are left with rising health care costs and fewer — if any — doctors in their area. It is increasingly a nationwide problem, physicians say.
    Dr. VanDerVeer, the Charlotte neurosurgeon, recalled one recent night on duty when two patients arrived in an emergency room in Myrtle Beach, S.C., where the area’s last neurosurgeons quit earlier this year.
    “No one in Myrtle Beach would accept responsibility for these patients,” he said. And because it was raining, the helicopters were grounded, so the patients were loaded into ambulances and driven the four hours to Charlotte.
    Upon arrival, one patient had died, and the other learned that she merely had a minor concussion — and a $6,000 bill for the ambulance ride.
    “That’s just one little slice of life here,” Dr. VanDerVeer said. “It’s a direct result of the medical-malpractice situation that John Edwards fomented.”
    Dr. Schmitt had spent 20 years delivering babies in Raleigh. Though he had no claims against him, his insurance tripled in one year. With no assurances that his rates would ever drop, or just stop rising, he left town.

  39. The American Medical Association lists North Carolina’s current health care situation as a “crisis” and blames it on medical-malpractice lawsuits such as the ones that made Democratic vice-presidential candidate Sen. John Edwards a millionaire many times over.
    One of the most successful personal-injury lawyers in North Carolina history, Mr. Edwards won dozens of lawsuits against doctors and hospitals across the state that he now represents in the Senate. He won more than 50 cases with verdicts or settlements of $1 million or more, according to North Carolina Lawyers Weekly, and 31 of those were medical-malpractice suits.

    One of his most noted victories was a $23 million settlement he got from a 1995 case — his last before joining the Senate — in which he sued the doctor, gynecological clinic, anesthesiologist and hospital involved in the birth of Bailey Griffin, who had cerebral palsy and other medical problems.
    Linking complications during childbirth to cerebral palsy became a specialty for Mr. Edwards. In the courtroom, he was known to dramatize the events at birth by speaking to jurors as if he were the unborn baby, begging for help, begging to be let out of the womb.
    “He was very good at it,” said Dr. John Schmitt, an obstetrician and gynecologist who used to practice in Mr. Edwards’ hometown of Raleigh. “But the science behind a lot of his arguments was flawed.”
    In 2003, the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists published a joint study that cast serious doubt on whether events at childbirth cause cerebral palsy. The “vast majority” of cerebral palsy cases originate long before childbirth, according to the study.
    “Now, he would have a much harder time proving a lot of his cases,” said Dr. Schmitt, who now practices at the University of Virginia Health System.

    no problem here folks move on

  40. “Let me add that the purely anecdotal claim that poor people in ERS are more likely to sue is often asserted in a racist context: “You know, you just can’t trust ‘those people.’”

    This is a pretty racist comment, are all poor people minorities? If talking about poor people as those people it seems pretty clear the “those people” are poor, where is race until you interject it, or can we not have any discussions about poor people without being racist?

    “hte majority of malpractice claims did invovle erors”

    THis means there were claims that did not. There have also been verdicts where there was no error and the doctors still lost multimillion dollar lawsuits, look at some of John Edwards cases if you want examples.

    You don’t need a large number of bogus lawsuits to have a disproportionate effect. See airline accidents for example, by far it is much safer to fly then drive but look what happens after an airline disaster. Helplessness is a very strong emotion, if you can do everything “right” and still lose a multimillion dollar lawsuit that can easily change you decision making.

    “First, a business strives first, and foremost, to make profits–for its owner, for its shareholders. A good business also tries to deliver a good product to customers, but under U.S. law, a corporation’s first responsibiltiy is to its shareholders, not to its customers..”

    Who is a mutual insurance company profiting off of and paying profits to?

    What about a non-profit corporation?

    Charities are business and plenty of them never make a penny nor pay management.

    Its just an absurd statement and you should no better with your background. A for profit business has a goal of making a profit, not all businesses are for profit and not all for profits have profitability as their main goal.

    “You can’t say: “I think I can get along without it.”

    BS you can’t, I have a couple members now that have stopped cancer treatment because the side effects and results weren’t worth it. Every day people see the cost of some new drug and say forget I can get along without it. I had a meeting last week with a group where a dependent was taking an $800 a month drug for acne and the parents said they could get along without it. Its this bogus victim mindset that we are all helpless that is the problem.

    ” If you have cancer and doctor or hospital tells you: “You need this treatment,” and you discover that it costs $$$$, you can’t say: “I’ll wait until competitors come out with a less expensive version. of that treatment.”

    They can say my local hospital cost 1/3rd of Aurthor Anderson so I will go there instead and they have equally good outcomes, that is the decison they are actually presented with.

    “Secondly, there is the problem that in our economy , businesses are, focused on “growth.” If they don’t grow profits, they won’t attract investors.”

    Which would only matter if every healthcare business had investors. Show us where Catholic Charities has put investor concerns over the treatment of patients, when have they streesed profits over care?

    “But as former NEJM editor Marcia Angell points out, insofar as health care has become a business “the pressure is to increase total health care expenditures, not to reduce them.” Here corporate goals conflict with society’s need to make heatlh care affordable.”Presumably, as a nation we want to constrain the growth of health care costs,” Angell adds. “But that is not what businesses do.”

    Very simplistic argument, what about the 50% of businesses that self fund their insurance plans, are they not motivated to constrain healthcare cost? What about the TPAs and cost containment firms they hire? I am a corporation and my goal every day is to constrain the growth of healthcare, argumented busted right there.

  41. John & Barry–

    John:
    Thanks for your response to Determined M.D.
    His reply to my comment illustrates why I asked Matthew to stop cross-posting my HeatlhBeat posts on The Health Care Blog a few months ago.

    For close to a year, a small but vocal band of THCB readers like “Determined M.D”. have responded to all of my posts on this blog with comments that focused solely on me, not the subject I was writing about. Their obsessive interest in me seems to trump any passing interest that they might have in ideas.

    As a result, they began taking over the thread that accompanied my posts , and those interested in discussing the ideas in the post simply gave up commenting. (Understandably–they didn’t want to be attacked too.)

    So now I no longer am cross-posted here, and only occasionally comment.
    John Irvine, THCB’s Exectuive Edtior, e-mailed me to say that he felt “terribly” about this. And I do too. But Matthew doesn’t want to censor his readers, which I understand.(Though upon occasion M has deleted particuarly personal attacks.)

    Barry:00
    You write: “I’ve heard from plenty of doctors who work in inner city ER’s that even poor people are not shy about suing when there is a bad outcome if they can find a lawyer to take their case which they often can.”

    This is a candard which some specialists use an excuse not to show up when they are “on call” for ER duty. Other doctors actuallly believe this piece of misinformatoin. The truth: “Empirical research has found that low-income, uninsured, and elderly patients are much less likely to file malpractice suits than are other patients with equivalent medical injuries.”http://www.thehastingscenter.org/Publications/BriefingBook/Detail.aspx?id=2264. It

    Note: The source (The Hastings Center), does impeccable research, and does not believe that our jury system is a good way to deal with malpractice.

    Let me add that the purely anecdotal claim that poor people in ERS are more likely to sue is often asserted in a racist context: “You know, you just can’t trust ‘those people.'”

    Barry, I am not accusing you of being in any way racist. I know you fairly well from your many comments on HealthBeat. But those comments also tell me that you tend to believe what a handful of “insiders” tell you. You should be wary: some of those insiders view low-income minorities with a combination of fear and contempt.

    Finally ,what you say about the “lack of objectivity, fairness and consistency both across jurisdictions and even within a jurisdiction as how medical disputes are decided.” also seems to be based on what you have heard anecdotally.

    See the study done by the Harvard School of Public Health which showed that judgements by juries in malpractice trials are actually pretty “reasonable” . (One of the co-authors of this reserach, which appeared in NEJM, is Atul Gawande) Everyone involved in the reserach was a physician, and after reviewing hudnreds malpractice claims, they wrote:

    ” portraits of a malpracticesystem that is stricken with frivolous litigation are
    overblown” The all-phyaisican panel reviewing these cases determined that “hte majority of malpractice claims did invovle erors and “the malpractice system performs reasonably well in its function of separating claims without merit from those with merit and compensating the latter.”http://www.hsph.harvard.edu/faculty/articles/litigation.pdf

    The big problem, they said, is not jthat uries are irrattional, overly emotional or unfair, but that the administrative costs of our malpratice system (settling cases or bringing them to trial) are Exorbitantly High.

    This is why they agree with you and I that we need another solution: many more hopsitals saying “we’re sorry” and offering full disclosure of what happened as well as special courts for medical suits.

  42. Got it.
    I’m totally in agreement about defensive medicine resulting in cascading tests and referrals. And I’m sure the working poor are the target audience for lawyers who advertise on the less-expensive air time channels and spots. Thanks for clearing that up.
    And what you said about middle and upper class appetites for all they can get their insurance or Medicare to pay for is also spot on. Glad we’re still buddies.

    The “tort reform” meme isn’t going away unless and until Congress takes action.
    (Obama tried to plant a seed but the loyal opposition seems more interested in orchestrating a first-term “FAIL” for the guy than doing anything constructive. When the GOP argues for military reductions I search the sky for flying pigs.)
    This is off-topic, but have you any opinion about safe harbor special courts for malpractice lawsuits, something like the business community has for thorny legal problems, i.e. bankruptcy?

  43. I’m sure Maggie can speak for herself but “…you seem to be an ally to the mentality of just making doctors assembly line workers” is waaay off base. That line makes me think you have neither read her book nor seen the documentary.

  44. “Implicitly, this argument call for government to own or employ all care providers like UK’s NHS system”

    Barry,
    Most professionals who practice medicine have been paid fees for providing medical services through the ages. Receiving professional fees for one’s service does not qualify, IMHO, as running a business. It is true that as medicine became more complex, physicians started hiring ancillary staff and they have to meet payroll and pay rent and so forth, and the same is true for hospitals. This is, however, a far cry from being a company that provides services to customers for a profit, with all that it implies.

    The question in my mind is what is the primary mission of the organization? Is it profit or is it healing? If a doctor sets up an office to practice his profession and is expecting to be able to make a decent living while taking care of patients, that is fine. If an investor buys health care facilities, hires physicians, buys machines, does marketing, etc. in order to turn a profit on his investment, and is expecting to service customers while making a profit, that is not fine with me.

    I don’t think the only two alternatives are publicly owned (ala NHS), or corporate owned (ala Kaiser, HCA, etc.). We have (had) a majority of ambulatory care and lots of standalone community hospitals and clinics operating based on mission. In our misguided quest for efficiency and economy, we decided that scaling up is the best way to go, because it works (worked?) well for manufacturing cars. There will be a steep price to pay.

  45. How ironic I agree with Ms Mahar for once, yet random chance statistically is 1 out of 20, so I guess we are at the 20th discussion.

    And yet, Ms Mahar, per your writings, you seem to be an ally to the mentality of just making doctors assembly line workers. Strange you comment here sounding like you diverge from that philosophy now.

    Or, maybe I am just mistakenly interpreting your comment.

  46. John –

    I have plenty of empathy for the plight of those who lack health insurance in America, especially the folks who are working hard in low wage industries like hospitality, restaurants and retail trade but simply cannot afford insurance, especially family coverage. That said I’ve heard from plenty of doctors who work in inner city ER’s that even poor people are not shy about suing when there is a bad outcome if they can find a lawyer to take their case which they often can.

    What’s critical about the American tort system as I referred to it is how it drives physician behavior. What drives physicians to practice defensive medicine is the total lack of objectivity, fairness and consistency both across jurisdictions and even within a jurisdiction as how medical disputes are decided. Juries of lay people who cannot understand the often conflicting scientific claims in these cases can be easily swayed by emotion and sympathy for injured plaintiffs.

    The inclination to practice defensively is especially prevalent in ER’s when the doctor and the patient often don’t know each other and there is time pressure to determine a diagnosis and send the patient on his or her way. This frequently results in a whole battery of tests, including expensive imaging, being ordered all at once. Even when doctors win their case, which they often do, it can take literally years to bring the dispute to a conclusion and the stress alone during the interim is enough to motivate doctors to avoid being named in a suit at all costs especially since they don’t suffer any financial consequences from overtreatment and they can actually benefit financially from doing more rather than less.

    Middle class and upper income patients as a group, for their part, think that more care and more expensive care is better care when it often isn’t. I don’t think this mindset is nearly as prevalent in other countries, especially as it relates to end of life care. While I have no doubt that people in other developed countries may not be fully satisfied with their healthcare systems either and they are all grappling with costs rising at an unsustainable pace, I stand by my previous comment.

  47. “…if we were to overlay the American medical tort system and American patients’ expectations..” etcetera….

    Barry, your voice is among those I have great respect for in these threads. Every time I see your name I know I am about to read something insightful and persuasive. But this time I must point out that there is no such thing as an “American” system of torts or expectations unless you want to dismiss those millions of people not part of the system for whom actionable torts are out of the question, in most cases because their access to medicine falls somewhere between emergency care only and none at all. And that same large group has, by definition, nothing but the most modest of expectations.

    One problem with policy discussions is just what you pointed out. It’s not possible to do a controlled experiment. I understand your point and you are correct as far as it goes. I just read something last week about the German dissatisfaction levels with their health care, as well as the complaint that German medical professionals feel underpaid and under-appreciated, which underscores your point. And most people arguing have an either-or attitude about government vs. private controls, not realizing that in most countries whatever the government provides (and by definition must control) is typically augmented by some private arrangements available to the public, from supplemental insurance types to direct payment to professionals.

    I can tell you that the working poor in America have a very stoic approach to professional medical and dental services. Medical services are mainly the end of pain endurance which typically means a trip to the ER because the notion of a PCP is no more a part of their understanding than an upstairs maid or golf caddy. Dental care is much the same, ending with a trip to a cheap dentist who will extract a tooth for cash. Again, crowns, root canals and braces are never part of their “expectations.”

    I could go on, but you get the point.

    And even as we speak Congress is taking steps to remove pounds of flesh from Medicaid because that represents the largest number of people without political influence in the worst need of government assistance.

  48. “the practice of medicine has no moral or ethical right to be a business, until the day comes when human life becomes goods.”

    Margalit (and Maggie) –

    Implicitly, this argument call for government to own or employ all care providers like UK’s NHS system though even UK has a private component which patients who can afford it can access. Whether or not there are public shareholders is not the issue here. Everyone from non-profit hospitals to doctors in private practice to privately owned home health agencies and skilled nursing facilities has to cover their expenses to stay in business. No margin, no mission.

    While it’s impossible to perform a controlled experiment to prove or disprove the point, I think if we were to overlay the American medical tort system and American patients’ expectations on, say, the German or French healthcare systems, both would be significantly more expensive than they are today. They might still be cheaper because of lower prices per procedure and a lower incidence of poverty but the fact that drug and device manufacturers as well as certain for profit hospitals have public shareholders is unimportant in the scheme of things. Separately, what would happen to the pace of innovation, especially in drugs and devices, if government alone funded and performed all research, the current NIH notwithstanding?

  49. “Why is it that we can’t simply accept that medicine is now a business? Let of the myth its a profession.”

    Because the practice of medicine has no moral or ethical right to be a business, until the day comes when human life becomes goods.

  50. June 16, 2011 at 5:45 pm Lynn asks:

    “Why is it that we can’t simply accept that medicine is now a business? ”

    First, a business strives first, and foremost, to make profits–for its owner, for its shareholders. A good business also tries to deliver a good product to customers, but under U.S. law, a corporation’s first responsibiltiy is to its shareholders, not to its customers..

    Customers are told: “Caveat Emptor”– “Buyer Beware.” An educated consumer is expected to understand that the seller will be trying to charge as much as possible– while spending as little as possible on manufacturing and delivering the product. It is up to the consumer to figure out whether he is being short-changed.

    Within the healthcare “business” the so-called “consumer” is a sick person who often is in pain, scared, and elderly. We spend 70% of our health care dollars when we are seriously ill. We are not in good position to negotiate prices, or wait for a better buy. If you have cancer and doctor or hospital tells you: “You need this treatment,” and you discover that it costs $$$$, you can’t say: “I’ll wait until competitors come out with a less expensive version. of that treatment.” You can’t say: “I think I can get along without it.”

    Secondly, there is the problem that in our economy , businesses are, focused on “growth.” If they don’t grow profits, they won’t attract investors.

    But as former NEJM editor Marcia Angell points out, insofar as health care has become a business “the pressure is to increase total health care expenditures, not to reduce them.” Here corporate goals conflict with society’s need to make heatlh care affordable.”Presumably, as a nation we want to constrain the growth of health care costs,” Angell adds. “But that is not what businesses do.”

    Finally, as Paul Starr wrote in the final chapter of his Pulitzer-prize winning “The Social Transformation of American Medicine” as health care became a business, “the goal driving [health care planning is ] no longer bbetter health, but “the rate of return on investment.”

    Drug companies, hospitals and others decide where to invest based, not on what patients need most, but on where their investments will create the greatest profits. Thus, drug companies invest in more allergy medications (a huge market) and cancer drugs (people are willing to pay anything) rather than resarch into trying to understand Alzheimer’s. And hospitals invest in cath labs (big profit-makers, though we do way too many unnecssary procedures ) rather than palliative care (which would insure that patients don’t die in pain.)

    Thanks to John Ballard for calling my attention to this thread

  51. Lynn asks:

    “Why is it that we can’t simply accept that medicine is now a business? ”

    First, a business strives first, and foremost, to make profits–for its owner, for its shareholders. A good business also tries to deliver a good product to customers, but under U.S. law, a corporation’s first responsibiltiy is to its shareholders, not to its customers..

    Customers are told: “Caveat Emptor”– “Buyer Beware.” An educated consumer is expected to understand that the seller will be trying to charge as much as possible– while spending as little as possible on manufacturing and delivering the product. It is up to the consumer to figure out whether he is being short-changed.

    Within the healthcare “business” the so-called “consumer” is a sick person who often is in pain, scared, and elderly. We spend 70% of our health care dollars when we are seriously ill. We are not in good position to negotiate prices, or wait for a better buy. If you have cancer and doctor or hospital tells you: “You need this treatment,” and you discover that it costs $$$$, you can’t say: “I’ll wait until competitors come out with a less expensive version. of that treatment.” You can’t say: “I think I can get along without it.”

    Secondly, there is the problem that in our economy , businesses are, focused on “growth.” If they don’t grow profits, they won’t attract investors.

    But as former NEJM editor Marcia Angell points out, insofar as health care has become a business “the pressure is to increase total health care expenditures, not to reduce them.” Here corporate goals conflict with society’s need to make heatlh care affordable.”Presumably, as a nation we want to constrain the growth of health care costs,” Angell adds. “But that is not what businesses do.”

    Finally, as Paul Starr wrote in the final chapter of his Pulitzer-prize winning “The Social Transformation of American Medicine” as health care became a business, “the goal driving [health care planning is ] no longer bbetter health, but “the rate of return on investment.”

    Drug companies, hospitals and others decide where to invest based, not on what patients need most, but on where their investments will create the greatest profits. Thus, drug companies invest in more allergy medications (a huge market) and cancer drugs (people are willing to pay anything) rather than resarch into trying to understand Alzheimer’s. And hospitals invest in cath labs (big profit-makers, though we do way too many unnecssary procedures ) rather than palliative care (which would insure that patients don’t die in pain.)

    Thanks to John Ballard for calling my attention to this thread.

  52. Medicine has become a business. It is no longer a profession. Now it needs to run like a business. If physicians are employees they need to be compensated as an employee. As an economist that means their salary must be less than equal to the marginal revenue they contribute to the firm.
    Current Medicare regulations limit a hospitals ability to pay a physician based on their productivity because that would be a violation of Stark…paying for referrals. There is no way to make the current irrational fee for service system work rationally unless the law/regulations change. Thus we face the quandary of viable ACOs.
    Why is it that we can’t simply accept that medicine is now a business? Let of the myth its a profession.

  53. It’s time for Docs who scrambled to obtain their coveted MBAs circa 1980s and 1990s to trade them in for MPHs going forward

    You want to run a business? Leave the profession of Medicine

  54. No it is not a bottom line issue in health care, sir, but it is about putting providers in positions that they are qualified to treat, not recklessly substitute! Your rationalizing and minimizing does not validate poor decisions and intentions.

    I’ve said it before and now again, we expect to live beyond our life expectancy as a species, and the entitlement and flagrant selfishness that in nearing pandemic levels in this culture especially will bankrupt us all in multiple forms. Reading these threads just reinforces what disgusts me of the politics that comes out in these forums, that being the extremist rhetoric of liberals and conservatives who are only interested in their party and ideology survival, not the well being of the public at large.

    Hence why I rarely come here anymore but to share a link that says it better than I do.

    You want to save health care, people? Start with yourselves, by asking these questions: What is quality of life to me, what are my abilities to maintain or resume it, and when do I call it quits that is as much if not more fair to those around me as much as for myself?

    Look in the mirror and honestly, candidly answer these questions, and maybe things have a chance to rebound in a responsible, effective manner. Until then, bash your heads in fighting your opposite but equally rigid and inflexible opponents!!!

  55. Sounds so noble to toss off “just to save money” but that is the cold-blooded bottom line, sir. And citing an insurance spokesperson to underscore your point is significant. That let-them-eat-cake approach to those who can afford neither medical care nor insurance is the reason for your “coming demise.” You are absolutely correct to say you get what you pay for. Millions of people are getting just that — nothing — because that’s exactly how much they can pay.

    Nearly half the working population does not pay income tax because they don’t earn enough, yet they still chip in payroll taxes (for which there is no standard deduction) from the first dollar they earn in order to fund Social Security and Medicare. And anyone who thinks those who don’t earn enough to pay income tax can afford decent health care with or without insurance is living in a fool’s paradise.

  56. Responsible health care is terminally ill, and everyone is to blame for the coming demise.

    I love watching how more organizations are turning to Nurse Practitioners and other non-MD providers to provide true physician services. An absolute failure, just to save money.

    You get what you pay for, yet, that adage is just ignored these days!

    PS: here’s a link to make your days!!!
    http://www.nypost.com/f/print/news/opinion/opedcolumnists/how_obamacare_destroys_your_privacy_zItwZSGoI661FeB1iC5POI

  57. Health systems are losing millions of dollars a month subsidizing physician practices under absurd, often illegal, income guarantees.
    All other things being equal, those losses are unsustainable, even if hospital generated incremental hospital revenue from employing the docs. There has to be a sustainable logic to physician employment for hospitals, a sustainable return on the investment. Where is it going to come from? Certainly not from ACO’s, or the other ACA science projects. And it isn’t going to come from “synergies” or “better co-ordination” from salaried practice either.

    Not to disagree that there’s a lot of waste, excessive compensation and lots of other things you suggest in the hospital world. Hospitals are not going to be able to pass along the cost of avoidable expenses under the price control regime ACA will bring to private health insurance; ACA will cut off the ability to cost-shift.

  58. “Hospitals cannot afford to continue losing money at the arterial bleeding level they are now, and many will be found to have violated Medicare anti-kickback statutes when the feds look at the contracts.”

    Help me understand how hospitals are losing money. I already know about uncompensated ER care, declining Medicare/Medicaid reimbursements, and insurance companies that play hardball. But a lot of hospitals have an impressive amount of expensive amenities having nothing to do with healthcare. Live plants inside and a landscaping regiment outdoors, marble floors and multi-story entrance lobbies with high-end light fixtures that would look good in a four star hotel. I expect to pay more in a shopping mall to stroll about in air conditioned comfort, and someone has to pay for the fountains, escalators and remodeling every five or ten years. But my expectations for a hospital are not the same. I’m happy if the staff is friendly and I can get coffee in the waiting room.

    Even with all that, the charges are out of sight. Are they getting ripped off for the latest state of the art equipment? I know technology is advancing rapidly, but are the new toys really all that wonderful? Please don’t tell me executive compensation and marketing are eating all the money.
    ~~~~~~~~~~~~~~~~~~~~~
    Incidentally, does anyone have comments about the arrangement mentioned by the author, David Williams? Looking at the link, it appears to be something of a group concierge arrangement but I didn’t see how the monthly retainer fee would be determined.

  59. and I don’t see how physicians benefit from this employment surge either, at least in the long run. When those initial contracts run out, there will be an equal surge in realization that incomes are about to plummet and non-compete clauses outlast the high payment agreements.
    Once patients are added to the purchasing system panel during practice acquisition, they are there to stay and few if any will be willing (or able) to follow their original doctor when he decides to leave, or when he is asked to leave.
    So I agree with Barry as well, it is about market share, which translates directly into higher per unit (or per head) revenue from private payers. That’s probably the same reason hospitals are merging with each other as well (like the recent deal in KY). Independent hospitals, just like independent doctors are becoming an endangered species in this power game. There is nothing in it for patients or consumers or individuals of any type or profession.

  60. Barry is right. Hospitals are buying hospital revenues by purchasing physician practices, but the yield is declining rapidly and the losses are greater than the last time hospitals tried this twenty years ago.

    This physician practice buying binge is different from the 1990’s version in several important respects. First, there are no physician practice management firms bidding up the price. Second, rather than buying primary care physicians cheap, hospitals are buying specialists- cardiologists, oncologists, surgeons. Until the ACO came along, there was no strategic reason for this.

    These specialists had become absurdly dependent on self-referred imaging revenues (nuclear scans, CT, PET and MR), and when the feds cut imaging payments in the 2005 Deficit Reduction Act, their practice business models collapsed. (This was the real double dip that Ballard referred to, not simply charging for physician visits.) A small cardiology group would come to the hospital and say “Do you want all my angioplasties and bypass referrals-or none?” It was highway robbery. Hospitals scrambled to avoid losing the business and gave them absurd income guarantees far in excess of their present (imaging depleted) incomes.

    When these contracts expire, there will be a work out period and many will be cut loose. Hospitals cannot afford to continue losing money at the arterial bleeding level they are now, and many will be found to have violated Medicare anti-kickback statutes when the feds look at the contracts. This is going to be a huge mess.

    After the debacle with Phycors and MedPartners, it will be a very long time before Wall Street pours capital into physician practice management, but they may back existing multi specialty or single specialty groups desiring to expand and take capitated risk/disease management fees. With the ACO idea melting down, it’s far from obvious how hospitals (or patients) benefit from the sudden, opportunistic surge in physician employment.

  61. “But I ask you, if they’re all buying doctors’ practices and losing money on each one they buy–won’t they make it up on extra services delivered elsewhere?”

    Matthew –

    Not necessarily. I think their expectation is that if the hospital owns the practice, it will capture more of the physician referrals and hospital admissions thereby increasing its market share. Moreover, it is likely to incorporate some measure of productivity in its compensation system, especially for determination of bonuses, in order to encourage the doctors to drive revenue for the mother ship. So, in the end, I think it’s more about driving market share than increasing services provided per patient.

    This dynamic is probably not a good thing from a system perspective because it could easily drive cost higher if the market share winners are the hospital systems that already have the greatest market power, market share and prices per procedure. While ACO’s as currently proposed have the potential to increase care quality by reducing duplicate testing and adverse drug interactions and, possibly, hospital readmissions, they are likely to cost far more to establish than the government thinks. In all likelihood, only hospitals will be able to afford the cost and manage the complexity. Also, most of the costs to run a hospital are largely fixed in the short to intermediate term. While payers want to keep patients out of the hospital, hospitals want to fill beds and salaried physicians who work for hospitals are likely to be incentivized to do just that. Risk adjusted capitated payments and global budgets sound fine in theory but they are unlikely to work in practice without rationing in my opinion.

  62. The real problem that David scoots over is that hospitals make a LOSS on the doctors practices they purchase. We’re talking about hospitals forming ACOs and reducing overall costs. But I ask you, if they’re all buying doctors’ practices and losing money on each one they buy–won’t they make it up on extra services delivered elsewhere?

  63. ‘…we ain’t spending as much on healthcare as we are losing on non-healthcare related expenses.”

    I completely agree. When people talk about finite resources and the need to ration care, I always have this uneasy feeling that we are nowhere close to exhausting our resources, if we just spent them on actual care delivery, including sizable incomes to those who deliver care directly.
    Judging by the recent frenzy of everybody and their grandma, from accountants to lawyers to guys selling computer cables, to “get into healthcare” nowadays, this is about to get much worse.

  64. Margalit, I defer to your knowledge of healthcare. I’m sure your take on the big fish eating the smaller ones is right. And I hope you are correct about the healing vs. profits tension being less ominous for smaller practices than big ones.

    “If the few profiteering independent physicians are akin to petty thieves, then corporate medicine is like organized crime.”
    That’s in the wish-I’d-said-that category.

    And fee for service is also not altogether bad by definition. When I take may car to be repaired or contract to build a house, it’s clearly necessary to tally up the main parts and services to make sense of any invoice.

    But itemizing aspirin, sponges, and the like (I’ve seen some shocking items on a hospital bill or two), along with some arbitrary, always extravagantly out of sight, room charge…. is like having an auto repair bill list an upcharge for the courier service that delivered a part, or having a building contractor itemize fixtures used by an electrical sub-contractor. There comes a point when fee for service gets over the top.

    And as you mentioned “charging insurers more for the same exact service from the same exact physician” is plainly out of line. Charges should be to patients, not insurers, based on actual costs plus operational expenses whether for profit or not. The practice of sending higher bills to insured patients than to those paying cash should be considered a violation of best practices. But I know that if I tell the business office I am paying my own bill the result might be an instant reduction of the charge. I know people insured with one of those high-deductible policies who pay cash for the first five grand every year and they know from shopping around the price spread is ridiculously vast, clearly not reflective of any actual “costs.” And when an uninsured family member informed a podiatrist he was gonna pay his bill himself because he didn’t have insurance the doctor reduced his charge dramatically on the spot… which underscores your point -, btw, about small practices being more tractable than the healthcare factories.

    After a lifetime in the business world my post-retirement work has been in the health care environment and I am amazed at the un-businesslike practices I have observed. I could rant for a page or two about percentages, budgeting, write-offs and stuff, but cutting to the chase my impression of what passes for “billing” is “throw a bunch of sh** against the wall, see what sticks, and write off the rest.” It makes my head swim to think about it. From what I have seen, the quality of healthcare is tolerably okay but the business aspect is an economic train wreck.

    My guess is that if the true costs could be measured — sans over-rides, waste, marketing, kickbacks, tax schemes and the rest — the outcomes would look much better on those world-wide comparisons because we ain’t spending as much on healthcare as we are losing on non-healthcare related expenses.

  65. What the hell is wrong with a rich doctor? I don’t get it?
    It is okay for a movie star to be rich, but not a doctor? Please.

  66. John,
    I am afraid that healing and profitability may be pulling in opposite directions all over the spectrum of care delivery, but somehow, I feel that this pull is less significant in a small private practice. Sure, the physician wants to maximize revenue, and some may upcode, and others may buy a dexa machine or some in-house analyzers, stress test stuff and so forth. Very amateurish and not significant in the big picture.
    However corporate medicine is a different story altogether. They have the financial and business expertise to really bring in the big bucks. On top of that, they are the ones creating a double dipping effect. When those corporations buy a private practice, they still have to pay the doc whatever he took home before (at least for a little while), they still have the same, or greater overhead (small practices are very lean and efficient), but now they also have to create some sort of profit for the organization. How do you do that? Either by charging insurers more for the same exact service from the same exact physician, and by creating more ancillary profits (tests, referrals, procedures, admissions, etc.).
    If the few profiteering independent physicians are akin to petty thieves, then corporate medicine is like organized crime.

    And what is wrong with fee-for-service? We pay fee-for-service on almost everything else we purchase. If people want to commit fraud, they’ll find a way, whether you pay fee-for-service, capitation, by the bundle, or any other arrangement, and unlike a small time doctor, big corporations have the means and expertise to do it all, and avoid paying taxes on top.

  67. Barry, I’m in complete agreement with you. Few people will ever earn as much as they want and the traditional alternatives include what you described, as well as consulting fees or originating some breakthrough performance technique which transforms a specialty. But those are the exceptions, not the norm, which unfortunately is crowded with more pedestrian operations vying for “market share.”

    A few film stars eventually become producers, some sports stars become franchise owners, In time big-name entertainers can get their own record label, and at least one Oprah cranked up her own network. But these are the exceptions, not the rule. I’m sorry, but for every Magic Johnson their are thousands of highly-paid basketball stars who have saved, redirected and invested their income in ways that furnish comfortable lifestyles for two or three generations, over and above their earnings alone.

    These are not the people I have in mind when I tossed out that “double-dipper” snark. That barb is aimed at the fee-for-service manipulator who (to use a phrase Margalit used in another comment) “upcode(s) diagnoses so the panel looks sicker ” or contributes to the large and growing number of questionable tests and procedures that yield little more than a healthier revenue stream.

    When healing and profitability pull in opposite directions where do you think my sentiments fall? As one of Maggie Mahar’s fans I give you one guess. Thanks for reading.

  68. @Barry,

    Maybe not all people who go into medicine do with the desire to “get rich.” My father told me several times growing up, “there is no such thing as an honest rich man.” Meaning that the only ways to get rich is to steal or defraud. Point out to me a “self-made millionaire” and you’ll be pointing to someone who cheated somebody sometime. In this corrupt, fallen world in which we live, there simply is no way to amass a huge fortune and do so without cheating someone.

    So no, I’m not rich, and don’t want to be rich. I make a good living providing a valuable service at market price, using my own skill and knowledge. That is all I want or need.

  69. John –

    The problem with your comment is that you cannot become rich in America working for a salary, even a high salary that is subject to ordinary income taxes. You get rich, putting inheritance aside for the moment, by being an owner of or partner in a successful business. For corporate executives, that means stock options and restricted stock awards. For others, it’s investing in real estate, oil and gas ventures, media, and a host of smaller business opportunities.

    For an orthopedic surgeon, it might be working with a device manufacturer to develop a more effective or longer lasting device on which he can then earn royalties. For an oncologist, it might mean working with a biotech company on the development of new cancer treatments in exchange for stock options or stock awards. I don’t fault doctors who aspire to become wealthy. I think they can still be very good doctors and not over treat their patients.

    That all said, when it comes to primary care, the trends including the need for more technology investment, more regulation, pay for performance approaches, capitation, etc. make it more attractive to be a salaried doc in a hospital or large multi-specialty group practice than to work solo or in a small group.

  70. Margalit, that’s my short cut (okay, cheap-shot) way of pointing out that doctors in private practice wear two hats. As a physician/healer the doctor is paid for professional expertise. And as an entrepreneur/investor doctors. either individually or as part of an investment group, get income from a corporate investment.

    In other words, a doctor working for wages and benefits as an employee of a hospital, clinic or other facility such as this column describes is receiving professional compensation, leaving business and investment problems to someone else. Contrast that with the medical entrepreneur worrying about leasing and depreciation, building and equipment maintenance, subordinate staff wages and benefits, and all the other time-consuming, pressure-cooker demands that come with running a business enterprise. If I were a newly-minted doctor I would take the professional position in a flash and hang up a shingle only if I had no other choice.

    Unfortunately (or fortunately) most doctors are better at medicine than business. But like other highly-paid professionals they often find themselves awash in so much income they feel the need to “invest.” Consequently the marketplace is crowded with competing enterprises owned and operated by groups of doctors who often find their professional success tied more to a corporation than their well-deserved but then endangered professional competence.

    Medical professionals should receive the best professional compensation the market allows, but that is certainly not the same as corporate profits for a business venture. Let investors bear the risks of corporate success or failure in the market while allowing the medical professionals the same security of good compensation that comes more from performance than investing.

    Does that help?

  71. Finally. The difference between professional compensation and corporate profitability is one of the least appreciated realities of health care. Not just physicians but all medical professionals deserve the highest compensation possible consistent with market economics. But as anyone who understands how to read a P&L knows, compensation and other benefits are expenses, not revenue, and by definition are a drain on bottom line profits.

    At the intersection of billing and healing, doctors in “private practice” are double-dipping and the fee-for-service business model is being forced to change.

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