Friday, January 25, 2008

Pay For Performance, Procedure Style


With all this talk about paying for performance in the cognitive sense,  I find myself wondering how it can be applied to procedural and imaging tests.


The increase in volume of services rendered across all fields is quite obvious.  Because the current system of reimbursement is paid on an eat what you kill basis, the motivation in our capitalistic society is to keep killing more and more so we can keep fattening  ourselves up.

As much as we would like to believe that all procedures are done out of medical necessity,  I know based on my experience as a physician, that not all procedures are done out of medical necessity.

Some are done out of legal necessity. (protecting your ass)
Some are done out of lack of information. (not looking up old records, or having access to old records)
Some are done out of greed.
Some are done out of ignorance.

Except for global surgical fees,  physicians are paid on a volume basis with every encounter leading to a billable fee.  Because of excessive discounting by Medicare/Medicaid/All insurance, physicians recoup the discounted fees by generating more volume.  It is the old game of what you lose on gross margins, you make up in volume.  

That's how commodity businesses survive. Increase your market share.  Expand your services.

This is done by double, triple booking patients in the office,  hiring extenders to do your job for you in the office or in the hospital.  

Doing your job for you.  

I over heard a cardiologist the other day say flat out to their NP.  "  I need help rounding and doing consults"

What the hell is that?

You are a cardiologist.  Why would you ever need to rely on an extender to do what you are paid to do?  Instead of hiring more cardiologists, which are expensive,  hiring an extender to do your job for you at 1/5  or less the price.

The reason is because having an extender round for you allows you to spend hours doing quickly highly reimbursable procedures like reading echos, stress tests, EKG's and caths.

When you have somebody else doing your job for you,  and you are simultaneously doing the highly reimbursable procedures, it is only natural from a business sense to pay somebody 1/5or less  what you are worth to do our job for you,  and collect the full fee for that encounter.

So here we are.  A health care system awash in technology.  Full of procedures.  Full of imaging. Full of scopes, catheters, needles, scalpels.

And how do we do?  Well,  apparently our health, for all the money spent is slipping down the world's ladder.

Do we spend to much?  

Yes.

Do we do to much?

Yes.

Why?

Because all the incentives to spend are aligned in favor of doing more, more, more.

The 5% of patients who consume 50% of our total health care dollars are herded from specialist to specialist as an outpatient.  Each doing the procedures that they know and love and that pay well.

The cardiologist does the Echo, the Cath, the Stress test
The gastro does the Scopes
The Pulmonologist does the PFT's, the bronchs
The Vascular guys do their angiograms, their dopplers


Name your specialist and you name your procedures.

How many procedures/results come back normal?  

I can't give you an exact number.  But I can say based on my experience, a heck of a lot.

Normal scopes.  Normal stress tests.  Normal EKG's   Normal CT scans. Normal path.  Normal xrays.

There is a  lot of money that we docs spend on things that come back with "normal"

I pose the question:

Why should a normal scope be paid the same as an abnormal one?
Why should a normal heart cath be paid the same as an abnormal one?
Why should a normal stress test be paid the same as an abnormal one?
Why should a normal CT scan be paid the same as an abnormal one?
Why should a normal path be paid the same as an abnormal one?

I pose the question:

Should a negative result be reimbursed at a lower rate than an abnormal result?
Should add on elements of a procedure not be reimbursable with a negative result?
Should I or my insurance company pay the same amount for a negative test as I do for a positive test?  

What would happen to the proceduralization of America if reimbursement was based on results of the test instead of the performance of the test.  

Would docs think twice about the financial incentive?

Would negative EGD's become the next read headed step child?
Would the cardiologist have more time to spend on rounds and less time "generating revenue."

It is a mind set that needs to be altered to slow the volume of services from an eat what you kill mentality to an eat based on your skill mentality.

I understand completely that no patient ever follows a text book and many an image or procedure are performed as a rule in or rule out diagnosis.  And that's all fine and dandy.

But as long as the work up of the  unknown diagnosis lives simultaneously with the financial incentive to do more of everything,  all the time, doing more will always win out.

That is a financial certainty.

How do you find a happy medium between need and waste.   Obtain necessary tests for a workup without encouraging excessive abuse of the system of an eat what you kill mentality.

I personally think reimbursement rates should be based on your cognitive ability to differentiate  the likely hood of normal from abnormal test result.


If you are a specialist in your field, then using your specialist skills should help differentiate, more often than not, whether a test will more likely be normal or abnormal.   The cognitive part of medicine should still be an important part of the workup, not something relegated to a NP.

Normal results should be reimbursed at a lower rate.  Whether that be tests, biopsies, imaging, scopes, path.  What ever.  

Perhaps removing the incentive to proceduralize patients at every possible moment in time is a concept who's time has come.

photo credit




16 Outbursts:

Anonymous said...

i guess hospitalists don't use physician extenders. :roll:

The Happy Hospitalist said...

You are correct. Our group does not use extenders. When we need more help, we hire more docs.

Anonymous said...

i guess there isn't a shortage of hospitalists then. when you want one, you can magically make one appear. regardless, of your group's practices, certainly there are many hospitalist groups attempting to integrate extenders into their practice.

the next step would be to stop taking hospital support and live off your own revenues before criticizing the hiring practices of others?

The Happy Hospitalist said...

the reason for the existance of hospitalist is because of the financial support that allows them to provide a service at a competitive wage, something you as a specialist enjoy with your procedures that generate revenue at the expense of cognitive care via the RVU/SGR/RUC fiasco.

Until Medicare/Medicaid understands how cognitive medicine should be reimbursed, it will always be a subsidized field. And primary care will continue to be a volume based business. Which is wront.

As for criticizing, the "hiring practices of others", it's hard to understand how a cardiologist who probably makes more than $500,000 a year needs their extender "to help do rounds and see consults".

I won't apologize for seeing the irony here. I'm pretty confident that the reason to hire extenders is only about money to maximize volume at the least possible cost.

To hire another cardiologist would mean sharing the procedure pool with another qualified individual. And THAT would really drive down each individual cardiologists revenue.

So yes I will criticize the hiring practices of others when it involves their ability to give my patients a consult with any thought involved.

As I see it, using extenders to do the cognitive work is sacrificing cognitive care to protect the procedural gravy train.

And I completely disagree with using extenders in any cognitive capacity as a replacement for physician duties. That includes primary care, hospitalists and specialists.

I wont apologize for calling a cat a cat.

When you have WIN-WIN, there is no reason to apologize.

Anonymous said...

This is a little off subject, but I'm curious to see what you think about doctors that are limiting the amount of patients that they see and charge a flat fee per person/couple/family once a year. This way they can apparantly make money, and spend more time with each patient and not schedule so many appointments, run inappropriate "money making" tests etc...

The Happy Hospitalist said...

anon: I am a strong believer in letting the market determine the prices. In our current system of payment, revenue is determined by a socialistic model in a capitalistic cost structure. The result is a volume driven initiative by all players, primary care and specialists alike.

The game is to keep the volume high enough to make up for lost revenue as the Medicare National Bank continually drops reimbursement. It will always be a losing proposition.

That means hiring extenders to do your job for you. Double booking and triple booking clinics, doing more procedures whether medically necessary or not.

It is the wrong way to practice medicine, for all doctors, primary care and specialists alike.

The current system of RVU/SGR/RUC creates a fixed pot of money where for every "winner" there is a "loser". For one group to get more, the other group must get less. It makes cognitive reimbursment subjected to the amount of procedures and surgeries and imaging being done. Since the pot is fixed, the more procedures/imaging/surgeries performed means the value of cognitive care must go down, or decreasing the value of procedural medicine to the advantage of cognitive medicine will cause an increase in procedures being performed.

When a concierge practice opens up, it removes itself from that fixed pot of money and allows market forces to play their way into medicine. It allows the patient to decide how much value they place on the service they get. It is independent of the fixed pot.

I believe, in the absence of any radical Medicare reforms, such as allowing balance billing, the current system is creating a critical shortage of primary care, due to failing reimbursements.

If allowing the patient to pay more for better service and better primary care where allowed through balance billing, I think you would see a very large population of primary care physicians who could thrive on a public's willingness to pay for time and service. Unfortunately, current rules make insurance an all or nothing phenomenon.

Leting the market decide the price always determines the right price. Competetion will set the price and the patient will decide with their check book whether it represents value to them or whether to shop around for a "cheaper" physician.

It is a WIN-WIN scenario. A happy patient and a happy doctor.

It is not volume driven.

It is service driven.

It is patient driven.

It is WIN-WIN driven.

So yes, I am a strong believer in allowing the patient decide what level of service they want, instead of lumping all patients into a volume driven system of care, via the current insurance all or none system.

For some patients, they will be willing to sacrifice service for price. They will wait for hours in the waiting room in cheaper volume driven offices. Others are willing to pay more for better service.

The delivery of physician medical services should be allowed to compete on price, not some articially determined price set by some obscure committee in a town thousands of miles away by those who don't get it.

Right now, the reimbursment game is driving volume, volume, volume at a morbid expense to our national health care wallet.

If a patient is willing to pay for service, they should have the option of paying for an extender or a physician. They should not be forced to have their workup be performed by a non-MD. In the current system, the patient does not have a choice. There are no rings of service, like every other possible service industry.

Patients are able to pick and chose what they want based on what they value. But not in the current form of medical insurance. The all or none rules have killed innovative advances in the insurance accepting physician market. It has turned great doctors into triage artists just to survive, a volume based viscious circle.

So leaving the insurance market is one way to offer quality medicine, time, and service. It is the only way to offer service without a volume based approach.

I pose the question for proceduralist physicians:

If their procedures were forced to compete on price. If an EGD, or a biopsy, or a heart cath or an angiogram were forced to compete in an open market with other like physicians offering the same service, what would happen to the price of their interventions.

Would they go up? Or would they go down.

If a colonscopy pays $200 now because the Medicare National Bank says that's what it's worth, would it still be worth $200 if you had 5 GI groups in a town all competing in an open market for colonscopy dollars?

Nobody will ever know what a colonscopy is really worth because the market is unable to set the price. The false economies of the Medicare National Bank are.

Competition always results in better service for a cheaper price. That is the nature of capitalism. Government should limit their role to making sure the rules of engagement are fair and legal, not setting prices and determining the value of a service.

I believe all physicians primary care and specialists alike who operate a volume mill do a disservice to their patients.

For the most part, and their are acceptions to every rule, I believe primary care does it to survive, while procedural specialists do it to thrive.

There in lies the key difference of the volume game.

As a medical student, if I had a choice between surviving and thriving, I think most would chose to thrive.

Anonymous said...

what does what you make a year have to do with needing help to see patients? it doesn't create more time for them. (i have no idea what they make anyways).

i can tell you my med school and residency classmate is making 400k as a hospitalist. (on a separate note, i don't think the hospitals needs to subsidize them to that point either.) he is having trouble hiring and turned to physician extenders. and he had the nerve to tell the primary care docs that he is not there to help them, he is there to help the surgeons with medical problems. anyways, i disagree with your characterization that using the midlevels amounts to less cognitive work. it allows the individual to be more efficient and not waste time doing things that other adequately trained and experienced people can do. why wouldn't you use people (that you pay a salary to) to gather data for you while you do the congnitive part?

Anonymous said...

Thanks for your in-depth opinion. I enjoy reading your blog!

stress said...

I felt that your post was highly enlightening. http://www.howtorelievestress.org
has a lot of tips on managing your stress! I find this website very useful.It definitely helped me, and I can see an improvement in my condition already.

The Happy Hospitalist said...

anon613:

I must have missed the transformation of the medical field from history being the most important part of an evaluation to history being a waste of time.

Knowing the right questions to ask is one of the most important parts of being a physician. It means much more than a check box H&P on every patient everytime.

I have stated before, when every patient of mine gets the same recommendation, thought has left the building.

Anonymous said...

What's also appalling is that patients have bought into the "more tests is better" psychology. Ask anyone in big managed care organizations (Kaiser, VA) how former fee-for-service patients react when they no longer get the completely unnecessary q 6 month echocardiogram for long-ago compensated heart failure or stable angina. Since patients by-and-large don't bear even a portion of the costs of procedures, they don't think to ask why a test is necessary and what would happened if they skipped the test.

Add another reason for unnecessary tests - ill-thought out guidelines. In general, I like *evidenced-based* guidelines, but what on earth is q yearly spirometry going to tell me about a COPD patient who already has a fixed FEV-1 of 0.5? But yearly spirometry without exception is part of an ill-conceived VA guideline and if the bean counters chose to, they could start making my computer pop up dialog boxes whenever a COPD patient is due for yearly spirometry (I can hardly wait.)

Anonymous said...

you yourself said the physician extenders wrote the best h&p's you had ever seen.
now you say their history is not good enough. you say you only consult when you need a procedure and then complain when the answer is always the same.
the history is important. that's why we pay people a lot of money to be able to get it right and review it with the patients.
why don't you just use another specialist if you don't like the service you get?

The Happy Hospitalist said...

anon

You can have a great history and physical...

for example a third year medical student's internal medicine written out H&P is a 4 page masterpiece of data which often times is meaningless or misses the important details.

Third years do a great job with their cook book check lists asking all the usual suspect questions.

They don't do a great job of weeding out what's not important and what is and pursuing the important stuff in more detail. Detail that takes time to tweek out the specifics. Knowing which questions to ask outside the box.

That does not happen with extenders running the specialty ship.

The specialty groups who use extenders all have the exact same check list for every patient of mine that is seen. No matter what the medical problem, no matter what the indication for the consult, every single consult is the same.

To that end, they fall short of cognitive evaluation of my patient. The consult becomes a default position of CT, scope or echo, stress, amio, or what ever the test dejour of the day is.

So you see, when I consult a specialist for an opinion, I expect them to evaluate the patient. If their extender is dictating a full physical exam, I expect my patient to get a full physical exam from the specialist

But they do not. They get a full level 5 consult charge courtesy of the Medicare National Bank, performed via an extender. They get a full physical exam from an extender. They get a check box history from an extender. And then they get a brief ecounter with a physician.

They do not get a cognitive workup. They get automatically proceduralized.


You ask why I don't use another specialist?

There are none. Either they are the only gig in town, or they all use extenders.


Just today I had a wonderful follow up note from a nurse practioner for a cardiology group. The note took up the whole page. Had all the required points of ROS, PE, data analysis to capture a level three follow up.


You know what the cardiologist had to add to the case today?

You guessed it.

His signature.

That's it.

What did the patient just pay for?

And what did I get for my patient?

Nothing. A total waste of money. When I consult a cardiologist I expect a cardiologist opinion. If you are too busy in the lab making money on echo's ekg,s stress tests and caths to give my patient the courtesy of your evaluation, then hire another cardiologist.

My patient deserves it.


It is a recurring theme over and over again. Using extenders instead of doing your job as a physician.

It is the dumbing down of medicine at work.

Anonymous said...

we've talked about this before.
they should not be charging a level 5 consult, or any consult for that matter, if the work is being performed as you describe.

does that matter to you? i doubt it, i'm sure you just want good care provided for your patients. for that matter, we can take the logical extension of your view is that the specialists should do their job as physicians and not need hospitalists at all.

do the specialists want more hospitalists? are you going to hire more just because someone else says you need to? their patients deserve good care too. maybe the other services think you could do more if you had more hospitalists.

The Happy Hospitalist said...

anon 250, what somebody else bills is of no consequence. I was just pointing out a fact that the templates used and the resulting dictated note always reaches a level 5 consult. It is a virtual certainty that is the case.

I do a lot of consults for specialists as a hospitalist, and I can assure you not every single consult reaches level 5 status. That is hardly the case.

It was a statement of fact. You called it, I just want good care.

The value of our service is evident in the complementary comments we get on an almost daily basis from a broad range of specialists, families, nurses. Our hiring practices are determined by our need and ability to provide great quality, efficient care.

If we see our census routinely higher than accepted standards for physician burnout, and efficiency, we expand our group, as we have done every year for the last 5 years.

Currently 18 strong, We are actively recruiting for more.

As far as someone else telling us we need more, that doesn't happen, because we are a private practice group. We make up the rules for ourselves.

A great hospitalist program provides a great service to everyone they come in contact with from specialists to families to nurses to all ancillary support in the hospital. I just guess I expect the same kind of effort given to patients, that I give.

An equal effort on patient care as given to procedural care. I see the financial incentives built into the current system shift responsibility and desire on a daily basis toward the procedural side of medical care. I think thoughtful cognitive evaluations suffer as a result.

Anonymous said...

well i don't have a midlevel and 100% of my dictations justify a level 5 consult. i actually bill less than 10% level 5 consults however. when i had a midlevel, the 'consult' notes were even longer, and i allowed the midlevel to make longer notes because that was what they felt comfortable doing and i did not want them to weed through the information more thoroughly then their skill level allowed. that permitted me to be more efficient when talking to patients and seeing them, although you and i disagree on this point.

do you know for a fact that your specialists aren't getting the same marks from your patients? maybe they are and you are being picky. i highly doubt that you can quantify effort to say that if it is more than an opinion that you are working harder, especially given that you are off so much (zing?). harder is so subjective when including call considerations and work environment situations.
as always, ymmv. sorry you are not happier with the service you receive.
maybe if you consulted the cardiologist more for heart failure admissions and atrial fibrillation, then they could justify hiring more people to provide the service you want. just a thought. they are probably going to have to follow them outpatient when primary care collapses anyways so might as well hire now before it becomes an emergency. so win-win?