Allen: Wheeler Dealer vs. Healer

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Editor’s note: This column by Terry J. Allen was first posted by In These Times. Allen is a freelance writer and photographer who lives in East Montpelier.

It’s time to crank up the death panels–no, not for granny. Instead we need to pull the plug on the profit-making machines that medical practices and hospitals are hooked up to.

Here is the problem: When any business invests in expensive equipment or technology, the new stuff must generate more income than it costs. Sometimes consumers, who ultimately pick up the tab, get good value, other times they get screwed, or worse.

About a third of all Medicare beneficiaries diagnosed with prostate cancer now get IMRT, a sophisticated radiation therapy for which docs can charge Medicare as much as $40,000 per patient. In 2008, Medicare handed over an estimated $1 billion or more on IMRT reimbursements.

Rather than using centralized equipment and sharing costs, physicians are concentrating their own profits by buying expensive in-practice technologies that pay off only if regularly used. One result is overtreatment, which is driving up health care costs, exposing patients to unnecessary radiation and surgeries, and is frequently no better than cheaper approaches.

The problem is replicated throughout American medicine, from relatively small practices and hospitals buying $1 million plus CT-scanners, to dentists purchasing new cone beam X-ray units that, because of high radiation and cost, should be used only selectively. Instead, general application of this technology exposes children and others to extra radiation. (Even veterinarians are cashing in; after one practice bought a high-tech dental system, its $600 kitty teeth cleanings became a community joke.)

The Wall Street Journal (WSJ) recently exposed one example of the public cost of this pattern. About a third of all Medicare beneficiaries diagnosed with prostate cancer now get IMRT, a sophisticated radiation therapy for which docs can charge Medicare as much as $40,000 per patient. In 2008, Medicare handed over an estimated $1 billion or more on IMRT reimbursements.

Urology practices are increasingly paying more than $3 million for “turnkey” IMRT setups, and then hiring radiation oncologists to deliver the treatment to patients in-house. This incestuous “self-referral” scheme is designed to slip through a loophole in the Stark law that bars physicians from referring Medicare patients to facilities where they have a financial interest. The Office of Inspector General ruled that it “stops just short of proclaiming the described [IMRT] arrangement as absolutely in violation of the Federal anti-kickback statute, [but] …has great concerns.”

Urorad Healthcare, which provides a ready-to-go IMRT operation, is more upbeat. The Texas-based company boasts: “There is no better revenue source available to urologists than IMRT. [O]ne urologist handling two new IMRT cases per month can increase his income by $336,000 annually. …Join the URORAD team and let us show your group how URORAD clients Double their practice’s revenue!”

“The sharp rise” in IMRT use is partly driven by “financial Incentives,” the WSJ concludes.

The necessity for aggressive treatment for many prostate cancer patients, especially the elderly, is controversial, and indeed, a 2006 study in the Journal of the National Cancer Institute found that 45 percent of men receiving IMRT were “overtreated.”

Medicare–which covers 47 million beneficiaries and costs taxpayers more than $500 billion a year–is a good place to start determining whether medical practices are scamming the system, wasting tax dollars, and favoring profitable treatments over good patient outcomes.

But access to Medicare’s comprehensive taxpayer-funded database is restricted by a three-decade old court order that effectively bars it from revealing billings by individual physicians. The order was won by the American Medical Association, which has repeatedly–and successfully–sued the government to keep secret how much the Medicare pays individual physicians for expensive procedures such as in-house IMRT.

And it can be a small fortune. Through extensive and very expensive reporting, the Wall Street Journal uncovered one doctor with a “pattern of billing which strongly suggests abuse or even outright fraud” to bill Medicare more that $2 million. Nonetheless, the Journal was legally barred from publishing the physician’s name.

Opponents of health care reform fling inflammatory terms such as “death panels” and “rationing” to discredit the need to gather evidence-based research essential to designing systems and treatments that benefit patients and society.

The irony is that while some docs get obscenely rich gaming the system and bilking taxpayers, honest physicians are often less well reimbursed by Medicare than by other insurance schemes.