Our Healthcare Industrial Complex

I have borrowed the phrase that President and former General Dwight D. Eisenhower made in reference to being wary of the power of the “military industrial complex.” Of course, he was alerting us to the business of war and the profit that could be made by being forever prepared to do whatever battle is needed. He was right then and he is right today, as this business is still a very powerful lobby. Yet, the purpose of this post is to help define why the US is #1 in the world in healthcare…cost that is…while being #37 in healthcare quality, both according to the World Health Organization. The reason is our Healthcare Industrial Complex.

Two weeks ago, “60 Minutes” did a report on HMA, which is a for-profit national hospital chain that owns a significant number of hospitals in the US. The source of the report is an interview with approximately 100 former physicians with HMA as well as a former Medicare/ Medicaid fraud expert who was in their employ. Their stories are remarkably similar and corroborated by the expert who eventually resigned. The problem they raised is the culture which required Emergency Room (ER) physicians to admit as many emergency room patients into the hospital as possible, even if they did not need to be admitted. They shared goal sheets and emails which highlighted ER physicians who did not admit a sufficient number of patients. Those who failed to remedy this shortfall were terminated.

Why would HMA impose these requirements? Money. The hospital made more money when patients were admitted. The ER doctors noted in the interview when you admit a patient who does not need care, you are actually exposing them to things they need not be exposed to such as the risk of infection or error. In other words with no upside on care improvement, they are only exposed to the downside risk. Yet, this is not unique to for profit hospitals. Even a non-profit hospital has a gain/ loss equation and the goal is clearly to take more money in than you spend. So, the same pressures exist in non-profit hospitals to admit more patients from the ER.

You may say that cannot be true, but in October the Readers DIgest released a story by Michelle Crouch called “50 Secrets Your Surgeon Won’t Tell You.” These are a compilation of comments by named and unnamed surgeons in the US which are consistent with the above theme to make money on the business of healthcare.

#23 – “You should know that practically all surgeons have an inherent financial conflict of interest. That’s because they are paid approximately ten times more money to perform surgery than to manage your problem conservatively,” said orthopaedic surgeon James Rickert, MD.

#31 – “About 25% of operations are unnecessary, but administrators email doctors telling them to do more….The Cleveland Clinic has said this system of paying doctors is so ethically immoral that it started paying its doctors a flat salary no matter how many operations they do, ” said Marty Makary, MD.

#33 – “Some doctors hire practice management consultants to help capture more revenue. The consultants may want the practice to sell equipment like knee braces or walkers at mark-up…or get an in office MRI. Every time a doctors does this, he becomes financially conflicted…you order more MRIs, so you won’t lose money on it,” said James Rickert, MD.

I am glad the article included the Cleveland Clinic example, as this clinic is known as one of the best in the country. The gravitation to salaried doctors has proven to both cost effective and quality improving there and elsewhere. This is one of the solutions to addressing our healthcare cost crisis in the US. The Affordable Care Act is purposed to find these best practices and make them more mainstream.

When people say we have the best healthcare system in the world, that is not true when looking at all measures of results. We are by far the most costly system in the world and have been for a while. Of course, those fully insured and with a means to pay for the finest doctors can get access to state of the art care. But, that applies to the very few, not the many. And, those who have no or little insurance have a much different experience. This is why the Affordable Care Act is so important – getting people covered, paying for care at time of use, and facilitating preventive medicine rather than reactive medicine.

I should mention that the significant majority of the comments in the Readers Digest article were care-oriented. These doctors want their patients to be successful. Here are a few:

#22 – “Some problems just don’t fix well with surgery, like many cases of back pain. My advice is grin and bear it….many people have a degenerative disk with no pain. There isn’t a lot of evidence that we’re helping very many people (through surgery),” said Kevin B. Jones, MD.

#28 – “What really keeps us up at night? It’s not making a mistake in the operating room; it’s the noncompliant patients. When patients don’t do what we tell them, bad things can happen,” said OB-gyn Kurlan Thott, MD.

#46 – “If your doctor wants to give you a stent, always ask: is this better than medicine….Having something planted in your body is not a risk free proposition,” said Marc Gillinov, MD.

#47 – “If I had any kind of serious medical condition, I’d go to a teaching hospital. You’ll get doctors involved with the latest in medicine…At a university hospital, you also have the advantage of having a resident or physician bedside 24-7, with a surgeon on call always available,” said Tomas A. Salerno, MD.

#8 – “It is better to have elective surgery early in the week because lots of doctors go away for the weekend and won’t be around to make sure you are OK…you are going to get someone who’s covering for the surgeon (over the weekend),” said an anonymous general surgeon who blogs under the name Skeptical Scalpel.

These doctors also compiled questions you should ask before surgery:

– Why do I need this procedure now?

– Who is going to be doing it, and how many times has he or she done it before?

– What are the most common complications, and how do you deal with them?

– What will the recovery be like?

– Who is going to take care of me after surgery (pulled from #7)?

These helpful suggestions among many others paint a more favorable picture. Yet, the other comments paint a picture of the business of healthcare. There is a conflict of interest these doctors and nurses are placed under to drive patients to more costly care which is more profitable to the hospital. It is not primarily motivated by better quality of care outcomes. It is more aligned with making money for the provider. With consultants advising hospital and doctors how to make more money by unbundling services, doing more unnecessary or repeated tests, admitting patients and doing more surgeries than necessary, it is easy to see why we have the most expensive healthcare system in the world.

I recall the complaints of HMOs back in the 1980s and 1990s, which were echoed by one political party toward Obamacare, saying the insurance companies or government would stand in the way of the doctor and patient. I do know these MDs at the insurance companies would show data to the hospitals and doctors showing the differences in cost and patterns of care. The purpose is to help find the more elegant care. The comment above about back surgery is pertinent. As of this post, I know three people whose doctors messed up their spines on surgeries that should not have been done or done by those doctors. This is the purpose of the intrusion. Absent that, a hospital may be forcing a decision upon a doctor that is not fully in the best interest of the patient.

I encourage you to read the Reader Digest article. I cited another one over the summer about things nurses won’t tell you. They both are helpful. But, at the center of all the healthcare is you the patient. If you cannot speak for yourself, get a proxy to ask your questions. Take better care of yourself by exercising and eating more healthfully. And, please get a second and maybe a third opinion on surgery. It is your body after all. A healthy sense of skepticism is always appropriate, so ask questions. The ones noted above are good place to start.


8 thoughts on “Our Healthcare Industrial Complex

  1. Great blog, BTG! The Cleveland Clinic is simply following the lead of the Mayo Clinic. They have had their MDs on salaries for years — it is a teaching Clinic and the doctors have rank and must publish, like any decent university. Ironically, they have a difficult time getting doctors to stay there because they (the doctors) can make so much more by going elsewhere where they will not be paid on a salary….and don’t have to publish!.

    • Thanks Hugh. Both of these clinics have a global reputation, so it is interesting that both pay salaries. Combining great reputation which builds a resume with opportunity, I see why some doctors look to leave at some point. Yet, the opportunity to practice what you preach with state of the art thinking and tools has to be appealing to many. Salaried docs doesn’t mean low paid docs, so I would think they would need to revalidate pay every year with the market. Thanks for writing. BTG

      • I think they do pretty well. But pay is relative and they see others making more than they do. I’m sure it is tempting to leave. But the ones I have dealt with seem very happy and love what they are doing: you can’t buy that!

      • I guess it depends on what floats your boat. There will always be movers looking for higher dollars chasing nirvana. They may realize later that the left the closest thing. Best regards, BTG

  2. Hola from a quiet hotel restaurant in coastal Ecuador! I’ve had little time online and am enjoying catching up on my favorite blogs while I take a much-needed day off from my bohemian life!

    You and Hugh provide sound reading material that keeps me informed on what’s happening in that fast-paced world that I weaned behind a dozen years ago. I miss my loved ones, but I don’t miss the materialism that I left behind! I also don’t miss witnessing how people absently ‘take a pill’ to get better without addressing what caused the problem! Often people will take a pill for cholesterol or high blood pressure instead of adjusting to a healthier lifestyle. They like handing over responsibility to a health-care giver. Thankfully there are many who still put the patient’s welfare first, although you point out via help from other articles that sometimes we should be extra cautious.

    It’s been years since my hands have cradled a copy of Readers Digest and I appreciated you sharing the information from Crouch’s article.

    Thanks, also, for your always-positive comments for my posts from the equator!


    • I feel exotic reading a comment from coastal Ecuador. Muchas gracias. Thanks for sharing your thoughts. It is funny, I get interesting reactions in quoting Readers Digest. I kind of like their little vignettes, yet some think I am shortchanging research. Your comment about cradling one in your hands is true. Yes, we here in the states will pop those pills rather than changing behavior. The truth is you need to do both. Have a good one. BTG

  3. Good article. The entire health care system is set up to earn money and squeeze every dime they can out of insurance and patients. The Public Option and/or Universal Health Care would be good improvements to add to ObamaCare.

    In regards to number #47 above, Teaching Hospitals are great for being up on the latest in medicine. However when it comes to the clinics it takes more time and visits to get things done than at a regular clinic. For example getting a mole removed: At a regular doctor office = 1 office visit and 1 lab fee. At a teaching hospitals clinic: With biopsy done = 3 office visits and 2 lab fees. No Biopsy = 2 doctor visits and 1 lab fee. Thereby costing both the patient more time and money, and more charges to the insurance company and Medicare.

    • Good comments. I guess we should save bigger things for the teaching hospitals and go the clinics for smaller things. That would be the more cost effective cost model. I agree about the public option which some GOPers thought Obamacare is. If we can get less dire need out of the ER and into a clinic, it will save lots of money and gain better care, especially with the incentive on the ER doc to admit you. Thanks and best regards, BTG

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