Paying Doctors to Ignore Patients

[groovedaddy]

THE longstanding push-pull between Medicare and Congress has erupted again. Last week, Congress, overriding a presidential veto, canceled Medicare’s scheduled 10.6 percent cut in payment rates for doctors, and instead raised the rates 1.1 percent. But this action fails to address the problem with the Medicare payment system, which is not the amounts doctors are paid but the way their payments are calculated.

Medicare pays doctors for specific services. If a patient has a checkup that includes an X-ray, a urine analysis and a physical, Medicare pays the doctor three separate fees.

Each fee is meant to reimburse the doctor for the time and skill he or she devotes to the patient. But it is also supposed to pay for overhead, and this is where the problem begins. To Medicare, a doctor’s overhead (or “practice expense”) includes such items as rent, staff salaries and the cost of high-tech medical equipment. When the agency pays a fee to a doctor who has performed a CT scan, it is meant to cover some of the cost of buying or leasing the scanner itself. Services using more expensive equipment generate higher fees.

Any first-year business school student can see the profit opportunity here. The cost of a CT scanner is fixed, but a doctor earns fees each time it is used. This means that a scanner becomes highly profitable as soon as it’s paid for.

http://www.nytimes.com/2008/07/24/opinion/24bach.html

[trotsky]

1. How do single-payer countries handle this?

Seems like we are wasting a hell of a lot of effort when someone else has already figured it out.

[semillama]

2. Wouldn't overhead related to a CT scanner also include the energy needed trun it?o

not to mention the costs related to having a facility needed to house the unit? Is this really a huge problem? Granted, charging overhead that is directly calculated to offset the cost of purchasing a piece of equipment should ethically cease after the equipment is paid off, but there's still overhead related to the use and maintenance of the machine.

[cosmik debris]

3. true dat!

You need shielding, climate control, and high voltage electrical supply. These things don't plug into a wall socket!

You are also going to pay $40K to $80K per year for a trained operator, and you will also need clerical staff. Chances are you will outsource reading the scan to a radiologist in Bangalore. That requires internet and server capacity. And somebody has to pay the radiologist.

Now lets talk about maintenance. A repair technician will cost about $300 per hour (portal to portal). An new x-ray tube may be over $30K (that number is from BEFORE I retired from the biz.) You can expect every maintenance call to cost at least $1500 + parts.

And don't forget the electric bill.

Add all that to the cost of borrowing a million dollars to purchase one of these babies and you see that it is not quite the opportunity that was described in the article.

My first impression was that this guy is a Republican trying to figure out a way to prevent patients from getting the diagnostics they need. But that's just an impression.

[Heddi]

4. what about the cost involved to have qualified people RUN the machine

and INTERPRET the results. Kind of hard to have a CT scanner when you don't have nurses or CT techs that are qualified to run the machine, make the images correctly, and use contrast media (which is injected in the vein) properly. Or to have radiologists who are able to accurately interpret CT images.

That's part of the cost of operation.

Also, if your hospital only has 1 CT machine (like the one I worked at did), and it broke down (which is often did), it was VERY expensive for the hospital because
1) they could not accept ER patients that had injuries that would require a STAT CT
2) for patients that were admitted and needed a STAT CT, the hospital had to pay the transportation costs to transport the patient to another facility for the CT scan. Also, an RN would have to accompany the patient in the ambulance, and when you did transport, you got double time for the entire trip

[Celebration]

5. how about ordering unnecessary tests?

If a doctor's scanner is not being used at capacity, there might be a tendency to order more tests than are necessary.

I really think these things should be split (treatments from the person ordering them)--when doctors have a financial interest in high tech treatments, those treatments have the tendency to get overused.

If the financial interests are separate, there is more of a chance that there is optimal use of these things, but not overuse.

And all of this is in play whether or not the scanner has been paid for or not--that seems immaterial to me.