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Health Care Costs Driven By Self-Dealing

Photo of Armand Leone

As long as the physician deciding on the treatment for a patient's condition is also the one being paid to provide it, medicine will have an inherent conflict of interest that prevents patients from receiving the best care at an efficient price often increasing health care costs. While the self-interest of a car salesman is obvious to a potential buyer, the conflicting self-interests of the physician when recommending a course of treatment are not. The result is that treatment plan options are often presented based on the training and financial interests of the physician. As a result, patients often undergo treatments that fit the physician more than the patient. This has clinical and financial consequences. More efficient and patient centric care would result if the physician who provides the medical treatment advice not be the one paid for providing the recommended treatment. The question as to what treatment is best for the patient is a different question from what is the best treatment that this physician can provide for a patient.

Despite the Stark Anti-Kick Back law, financial incentives still have an effect on treatment and health care costs. Knee MRI exams are more likely to be negative if ordered by physicians who have a financial interest in the imaging equipment being used. Normal coronary angiogram rates disease differ widely among hospitals, with some as low as 18% while others hospitals had a negative study rate of 77%. Because these are fee-for-service procedures, the more done, the more revenue received. These are recognizable financial conflicts of interest that drive up medical costs.

Conflict of interest at the patient level is less apparent to both the physician and the patient. The conflict exists mostly within medical and surgical specialties that involve treatment by way of surgery or other interventional procedure where payment is procedure-based. The approach each specialist physician takes to treat a problem is a product of residency training program, the available equipment and the physician's own skill set. For instance, a surgeon is going to recommend the procedure she is most comfortable with based on her training and experience. However when open surgery, laparoscopic surgery, robotic surgery, an interventional procedure or medical therapy are all available options for treating a particular condition, it is hard for a physician expert in one of them to present the other treatment options properly. Each physician has less clinical familiarity with the other treatment options, and therefore is less able to advocate for the alternatives. Furthermore, the physician will lose revenue if the "business" goes elsewhere. Even if financial incentives are not a conscious part of the formulation of physician's treatment recommendation, business pressures are still a factor in the recommendation that is ultimately made.

Currently, the physician's price for making a treatment decision is bundled together in the price for the treatment itself. Until payment to the physician who is providing treatment advice is separated from the physician who is paid for the treatment, treatment decisions will be driven as much by the doctor's clinical bias and financial interests as by the patient's best interest. Even though the financial incentive is probably not consciously factored into the treatment recommendations of most physicians, it nevertheless has an influence on the recommendations made. In order to eliminate this inherent conflict in medical decision making, physicians who are paid for providing treatment should not be the ones who paid for helping the patient decide which treatment to undergo.

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