Fair is fair

All physicians have a problem with people who don’t pay their bills. My previous multispecialty clinic would ultimately fire patients who made no effort to work out a payment plan. The internal medicine physicians advocated that policy. But the physician across the table from me at lunch one day was a pediatric subspecialist, the only one of her kind within a 3-hour drive. Her concern was for the medical care of the child. She didn’t want harm to come to the child because the parents were deadbeats. Some of her patients had complex problems that would not be within the capability of local general pediatricians. If fired from our clinic, the parents might not make the trip to the academic centers 3 hours away to obtain needed subspecialty service. Reporting that behavior as medical neglect was ineffective given the dire financial condition of the state’s child-protective services. What was the moral thing to do?

Ethics consults come in a variety of forms. Most are questions involving a particular patient, but many involve policy. As a clinical ethicist, my repertoire for addressing these issues run the gamut from conversations with CEOs, to ethics committee meetings, to bedside consults with families, to discussions in the hospital physicians’ lounge. While the media are enamored with flashy medical ethics problems such as abortion, stem cells, and lung transplants, the majority of my work has been more mundane, centered on financial issues, and informal consults, such as the discussion I had over lunch.

Ultimately, the discussion came down to deciding what is fair and just, tempered by compassion and advocacy for the child. In times gone by (a.k.a the 1950’s and 1960’s), physicians would provide services and then reach into the insurance company treasury and take whatever sum they considered appropriate. As long as it was usual, customary, and reasonable, the insurance company was happy to pay it, add a surcharge, and pass the costs on to the patient’s employer or the government. The out of control inflation of health care costs in the 1970s and 1980s changed the game. Managed care organizations were at financial risk for increasing costs. They began setting and enforcing the doctor’s reimbursement rates. Dentists avoided this problem by maintaining balance billing. Most physician contracts banned that option.

As health care costs kept increasing (they exceed 17% of the GDP according to the latest data), there has inevitably been increased scrutiny of the fairness of the system and the size of the piece of the pie each physician receives. Relative value units (RVUs) were introduced to provide a comparison for the work provided by different specialties. For more than 40 years, John E. Wennberg has been studying how costs vary between counties and other small geographic areas. Atul Gawande called the public’s attention to the problem of utilization variation in a New Yorker article of 2009 entitled, "The Cost Conundrum." He noted that a town in Texas was spending more than twice as much per capita on Medicare as El Paso, Tex. Many people have used these data to suggest that the United States has a major problem with overutilization. Some advocates of Obamacare anticipate it can achieve substantial cost savings by reducing variation toward a norm.

However, in May 2013 an article by James D. Reschovsky and his associates was published suggesting that 75%-85% of the variation might actually be explained by differences in health status of the local population (Med. Care Res. Rev. 2013 [doi:20131077558713487771]). If this is true, the potential for cost savings is substantially reduced. Critics claim it is possible that physicians in poor health status areas are just better and more aggressive at coding comorbid conditions. The research hasn’t been able to distinguish these behaviors. But these are important issues in establishing fair reimbursement.

In the long run, having a fair system is important. We cannot depend upon charity care by individual physicians to make up for disparities. For instance, each summer when I have worked in an urban location, some local group has created an outlet for providing low-cost school physicals and asked physicians to donate time to the project. From a medical standpoint, I have argued that without growth charts and without prior records to identify chronic medical conditions and disabilities, these doc-in-the-box school physicals, while cheap, are a waste of money and my time. My ethical concern is whether, by participating in that charade, I am actually delaying the development and implementation of an appropriate health care system. I expect that ethical conundrum also has significant regional variation.

Dr. Powell is an associate professor of pediatrics at St. Louis University and a pediatric hospitalist at SSM Cardinal Glennon Children’s Medical Center in St. Louis. He said he had no relevant financial conflicts. Readers can e-mail Dr. Powell at [email protected].

All physicians have a problem with people who don’t pay their bills. My previous multispecialty clinic would ultimately fire patients who made no effort to work out a payment plan. The internal medicine physicians advocated that policy. But the physician across the table from me at lunch one day was a pediatric subspecialist, the only one of her kind within a 3-hour drive. Her concern was for the medical care of the child. She didn’t want harm to come to the child because the parents were deadbeats. Some of her patients had complex problems that would not be within the capability of local general pediatricians. If fired from our clinic, the parents might not make the trip to the academic centers 3 hours away to obtain needed subspecialty service. Reporting that behavior as medical neglect was ineffective given the dire financial condition of the state’s child-protective services. What was the moral thing to do?

Ethics consults come in a variety of forms. Most are questions involving a particular patient, but many involve policy. As a clinical ethicist, my repertoire for addressing these issues run the gamut from conversations with CEOs, to ethics committee meetings, to bedside consults with families, to discussions in the hospital physicians’ lounge. While the media are enamored with flashy medical ethics problems such as abortion, stem cells, and lung transplants, the majority of my work has been more mundane, centered on financial issues, and informal consults, such as the discussion I had over lunch.

Ultimately, the discussion came down to deciding what is fair and just, tempered by compassion and advocacy for the child. In times gone by (a.k.a the 1950’s and 1960’s), physicians would provide services and then reach into the insurance company treasury and take whatever sum they considered appropriate. As long as it was usual, customary, and reasonable, the insurance company was happy to pay it, add a surcharge, and pass the costs on to the patient’s employer or the government. The out of control inflation of health care costs in the 1970s and 1980s changed the game. Managed care organizations were at financial risk for increasing costs. They began setting and enforcing the doctor’s reimbursement rates. Dentists avoided this problem by maintaining balance billing. Most physician contracts banned that option.

As health care costs kept increasing (they exceed 17% of the GDP according to the latest data), there has inevitably been increased scrutiny of the fairness of the system and the size of the piece of the pie each physician receives. Relative value units (RVUs) were introduced to provide a comparison for the work provided by different specialties. For more than 40 years, John E. Wennberg has been studying how costs vary between counties and other small geographic areas. Atul Gawande called the public’s attention to the problem of utilization variation in a New Yorker article of 2009 entitled, "The Cost Conundrum." He noted that a town in Texas was spending more than twice as much per capita on Medicare as El Paso, Tex. Many people have used these data to suggest that the United States has a major problem with overutilization. Some advocates of Obamacare anticipate it can achieve substantial cost savings by reducing variation toward a norm.

However, in May 2013 an article by James D. Reschovsky and his associates was published suggesting that 75%-85% of the variation might actually be explained by differences in health status of the local population (Med. Care Res. Rev. 2013 [doi:20131077558713487771]). If this is true, the potential for cost savings is substantially reduced. Critics claim it is possible that physicians in poor health status areas are just better and more aggressive at coding comorbid conditions. The research hasn’t been able to distinguish these behaviors. But these are important issues in establishing fair reimbursement.

In the long run, having a fair system is important. We cannot depend upon charity care by individual physicians to make up for disparities. For instance, each summer when I have worked in an urban location, some local group has created an outlet for providing low-cost school physicals and asked physicians to donate time to the project. From a medical standpoint, I have argued that without growth charts and without prior records to identify chronic medical conditions and disabilities, these doc-in-the-box school physicals, while cheap, are a waste of money and my time. My ethical concern is whether, by participating in that charade, I am actually delaying the development and implementation of an appropriate health care system. I expect that ethical conundrum also has significant regional variation.

Dr. Powell is an associate professor of pediatrics at St. Louis University and a pediatric hospitalist at SSM Cardinal Glennon Children’s Medical Center in St. Louis. He said he had no relevant financial conflicts. Readers can e-mail Dr. Powell at [email protected].

All physicians have a problem with people who don’t pay their bills. My previous multispecialty clinic would ultimately fire patients who made no effort to work out a payment plan. The internal medicine physicians advocated that policy. But the physician across the table from me at lunch one day was a pediatric subspecialist, the only one of her kind within a 3-hour drive. Her concern was for the medical care of the child. She didn’t want harm to come to the child because the parents were deadbeats. Some of her patients had complex problems that would not be within the capability of local general pediatricians. If fired from our clinic, the parents might not make the trip to the academic centers 3 hours away to obtain needed subspecialty service. Reporting that behavior as medical neglect was ineffective given the dire financial condition of the state’s child-protective services. What was the moral thing to do?

Ethics consults come in a variety of forms. Most are questions involving a particular patient, but many involve policy. As a clinical ethicist, my repertoire for addressing these issues run the gamut from conversations with CEOs, to ethics committee meetings, to bedside consults with families, to discussions in the hospital physicians’ lounge. While the media are enamored with flashy medical ethics problems such as abortion, stem cells, and lung transplants, the majority of my work has been more mundane, centered on financial issues, and informal consults, such as the discussion I had over lunch.

Ultimately, the discussion came down to deciding what is fair and just, tempered by compassion and advocacy for the child. In times gone by (a.k.a the 1950’s and 1960’s), physicians would provide services and then reach into the insurance company treasury and take whatever sum they considered appropriate. As long as it was usual, customary, and reasonable, the insurance company was happy to pay it, add a surcharge, and pass the costs on to the patient’s employer or the government. The out of control inflation of health care costs in the 1970s and 1980s changed the game. Managed care organizations were at financial risk for increasing costs. They began setting and enforcing the doctor’s reimbursement rates. Dentists avoided this problem by maintaining balance billing. Most physician contracts banned that option.

As health care costs kept increasing (they exceed 17% of the GDP according to the latest data), there has inevitably been increased scrutiny of the fairness of the system and the size of the piece of the pie each physician receives. Relative value units (RVUs) were introduced to provide a comparison for the work provided by different specialties. For more than 40 years, John E. Wennberg has been studying how costs vary between counties and other small geographic areas. Atul Gawande called the public’s attention to the problem of utilization variation in a New Yorker article of 2009 entitled, "The Cost Conundrum." He noted that a town in Texas was spending more than twice as much per capita on Medicare as El Paso, Tex. Many people have used these data to suggest that the United States has a major problem with overutilization. Some advocates of Obamacare anticipate it can achieve substantial cost savings by reducing variation toward a norm.

However, in May 2013 an article by James D. Reschovsky and his associates was published suggesting that 75%-85% of the variation might actually be explained by differences in health status of the local population (Med. Care Res. Rev. 2013 [doi:20131077558713487771]). If this is true, the potential for cost savings is substantially reduced. Critics claim it is possible that physicians in poor health status areas are just better and more aggressive at coding comorbid conditions. The research hasn’t been able to distinguish these behaviors. But these are important issues in establishing fair reimbursement.

In the long run, having a fair system is important. We cannot depend upon charity care by individual physicians to make up for disparities. For instance, each summer when I have worked in an urban location, some local group has created an outlet for providing low-cost school physicals and asked physicians to donate time to the project. From a medical standpoint, I have argued that without growth charts and without prior records to identify chronic medical conditions and disabilities, these doc-in-the-box school physicals, while cheap, are a waste of money and my time. My ethical concern is whether, by participating in that charade, I am actually delaying the development and implementation of an appropriate health care system. I expect that ethical conundrum also has significant regional variation.

Dr. Powell is an associate professor of pediatrics at St. Louis University and a pediatric hospitalist at SSM Cardinal Glennon Children’s Medical Center in St. Louis. He said he had no relevant financial conflicts. Readers can e-mail Dr. Powell at [email protected].