Hey, ever notice how capitalism and cannibalism sound an awful lot alike?
On the rare, unfortunate occasions when I must deal with doctors, I am relieved to have access to their expertise and insurance to pay for it. But that doesn't change the fact that the health care industry is filled with capitalist dogs. Two examples:
Jonathan Ellis follows up on his coverage of surgeon Allen Sossan's alleged malpractice with a report on a new lawsuit by Michelle Weidner-Jordan, the former head of physician-owned Lewis and Clark Specialty Hospital, where Sossan was a doctor and owner. According to her lawsuit, Sossan harassed and threatened fellow employees but was immune to discipline because he was bringing big profits by performing unnecessary medical procedures. When he was finally booted in March 2012, profits dropped. Weidner-Jordan says the hospital board blamed her for the losses and told her resign or be fired last summer.
It sounds as if Lewis and Clark was more worried about turning a profit than practicing good medicine and good management, But in the topsy-turvy ethics of the Hypocritic Oath, Sioux Falls doctor and conservative R. Blake Curd says profit motive couldn't motivate doctors to do such things:
But Sioux Falls surgeon Blake Curd, president-elect of the Physician Hospitals of America, an advocacy group for doctor-owned hospitals, disputes that it’s a conflict. Curd said the facility fees are spread out among a pool of doctors that typically own small shares in the hospital, so there’s not an incentive to admit patients for procedures that aren’t needed.
“The reimbursement on the surgical fee is several times what the reimbursement would be on the facility fee,” he said [Jonathan Ellis, "A Lawsuit Is Shining Fresh Light on Specialty Hospitals," that Sioux Falls paper, 2014.06.08].
Since the surgical fee is the real meat, there's no motivation for doctors to reach for the gravy of the facility fee. Right, R. Blake.
The profit motive in medicine also appears to be driving exploitation of Medicare Advantage, costing taxpayers billions of dollars. Under Medicare Advantage, Medicare contracts with private insurers to provide coverage that can offer more services and lower out-of-pocket costs than original Medicare.
However, Medicare Advantage uses a "risk score" to reimburse its health plans: the sicker the patient, the higher the reimbursement for a a given procedure.
The Center for Public Integrity finds that insurers appear to be inflating those risk scores to inflate their reimbursements, with such inflation notably prominent in South Dakota:
Risk score errors triggered nearly $70 billion in “improper” payments to Medicare Advantage plans from 2008 through 2013 — mostly overbillings, according to government estimates. Federal officials refused to identify health plans suspected of overcharging Medicare, citing agency policy that keeps many business records confidential. The Center is suing to make these records public.
Risk scores of Medicare Advantage patients rose sharply in plans in at least 1,000 counties nationwide between 2007 and 2011, boosting taxpayer costs by more than $36 billion over estimated costs for caring for patients in standard Medicare.
In more than 200 of these counties, the cost of some Medicare Advantage plans was at least 25 percent higher than the cost of providing standard Medicare coverage. The wide swing in costs was most evident in five states: South Dakota, New Mexico, Colorado, Texas and Arkansas [Fred Schulte, "Why Medicare Advantage Costs Taxpayers Billions More Than It Should," Center for Public Integrity, 2014.06.04].
The Center for Public Integrity says the Medicare Advantage error rate has averaged 12% over the past six years. Last year it dropped to 9%, or $11.8 billion. $9.3 billion of that was overcharges. Meanwhile the SNAP/Food Stamps error rate in 2012 was 3.42%, or about $2.5 billion. But since hungry people can't afford lobbyists and media campaigns, Senator John Thune squawks about waste and abuse plaguing Food Stamps while opposing cuts to root out waste in Medicare Advantage (cuts on which the Obama Administration bailed in April).
Doctors and insurers have to eat. But we can all recognize the difference between healthy eating and cannibalism.