Economic Differential Diagnosis

Here's something you may not think of every day. Having insurance may actually be at the root of defensive medicine. I speak from personal experience, but I'm sure there are many docs out there that will rationalize their decisions in the same way. So here goes.

Let's imagine for a moment that you knew before hand whether the patient had the platinum insurance plan that paid for everything with no deductible or whether the patient had no insurance at all and was responsible for 100% of the charges on their own. Let's imagine for a moment how this would affect your decision making.

In my experience the patients without insurance will get less care. This does not mean worse care. Why? Because there may be more discussion in the decision making process. I have gone down this road before, and it can be intellectually and clinically satisfying.

Let's imagine for a moment that I am moonlighting at a local adult only urgent care center that has access to all the latest technology, CT's MRIs, EKGs X-ray, lab, Doppler. As a physician I could order just about anything I saw fit for any possible scenario that walked into my door.

Let me give you the following hypothetical clinical scenario.

A 35 year old female on birth control pills comes to your moonlighting urgent care center with shortness of breath. She has a history of anxiety. She is recently recovering from a viral illness. She has no other medical problems. She takes no other medications. No family history of clotting disorders. She does however have pain with inspiration. Her exam is normal, including lung exam. Her BP, HR O2 sat and temp are all in the normal range.

What happens next? How aggressive are you with the patient? After taking a history and physical examination a differential diagnosis is created based on your available information. Asthma? Bronchitis? Pulmonary embolism? Heart Failure? Pneumonia? Coronary disease? Drugs? Anxiety? GERD? Pleuritis? Lupus? Scleroderma? Fibrosis? PPH? DKA? Sepsis? Stachybotrys Atra? You could go on and on and on with possibilities in your differential diagnosis. The question is, where do you end?

I'll tell you where you end. You end where the community standard says you end. And in many communities, the standard is to do everything because that's what everyone does. And that's what everyone does because someone else is paying for it. And because someone else is paying for it, there is little hesitation to restrain ones work up both from the physician's perspective and the patient's perspective.

When you are working up a sign or a symptom, medical evaluations deal with probabilities and possibilities. The key to being a great clinician is to be able to understand what the likelihood that any given patient has any given condition on any given day. And to get it right every single time.

However, I contend that the mentality of the medical work up is different based on the payment model you function within. I contend that two things happen when we operate our practice in a third party insurance system.

1. Physicians spread the cost of minimizing malpractice risk from one patient encounter over many healthy patients by way of defensive medicine practices. This means over testing in the belief that the standard of care IS to over test, and failure to do so would result in liability for failure or delay in diagnosis. Over testing has the believed effect of decreasing risk of malpractice exposure by decreasing the risk of failure or delay in diagnosis. The more you test, the more conditions you exclude (whether perceived or real) and the smaller the expected risk of delayed diagnosis. Physician's practice in this way because of a selfish desire to limit their exposure to malpractice risk, perceived to be real and present. It is human nature to protect one's economic self interest. Physicians are no different. While the duty of the physician may be to the individual patient, physicians are, in fact, practicing medicine in a selfish desire to limit their exposure to risk. They have to. The community standards have been set so high. And they have been set so high due to the unlimited funds available for over testing in third party payment models. Over testing has established irrational standards of care. And those standards drive further testing in a vicious circle of defensive medicine. Physicians accept the practice of defensive medicine by rationalizing that the cost of minimizing their malpractice risk is spread over millions of premium paying patients, both private and government, who then absorb the cost by way of premiums that rise every year at inflationary rates that exceed CPI or population growth.
   
2. Patient's have a selfish desire to limit their risk of unknown by allowing the cost of their expensive testing to be spread over millions of other premium paying customers. What do patients want?   Patients want to limit their risk, just as physicians do. The third party model treats individual patients as consumers of unlimited resources. Whether they are passive or active players in over testing, patients also believe that their risk of harm is limited by over testing. The brunt of the cost of this belief is born by others which allows patients to rationalize the expense in the selfish desire to limit their own perceived risk of failure or delay of diagnosis.

Points #1 and #2 above are the basis for a FREE=MORE health care delivery system. It does not matter if the delivery system is a government single payer or a private insurance company, the perceived cost to both physician and patient of over testing is "free" because the brunt of the cost for the physician to reduce their malpractice exposure and for the patient to reduce their risk of unknown is spread over millions of other premium paying patients. Both parties allow, and quite frankly expect over testing as a selfish desire to protect their own economic self interest. It will ultimately be unsustainable no matter how many EMRs you build or how many PQRI programs you create or how many ways you rearrange the Titanic. You cannot legislate economic self interest out of health care delivery. All third party payment models are doomed to failure 100% of the time. The selfish economic self interest of all the players will force it to. I personally don't believe that you can centrally ration any third party payment model and still maintain a functioning health care system. Picking and choosing which services to ration would be socially intolerable, open to the political whims (like the TARP bank fiasco) of power hungry politicians greased and bribed by the lobby interests that keep them in power. Ultimately, the process would be incapable of limiting costs. Where some costs disappear, others would explode. Medicare and Medicaid costs are proof positive that only the market is capable of determining price. You cannot legislate a price without unintended consequences of health care reform at every turn. Price must be determined by market forces for the supply and demand for equilibration. Those who believe in central planning need only look towards the failed policies of communism to understand why government cannot artificially price services, being both the buyer and the seller of their goods.

So, how do you get limits back into health care? Health care that is rationed based on individual decision making?I like to call it the economic differential diagnosis,a process based on a combination of financial and medical decision trees. I contend that knowing whether someone has insurance or not will force both physician and patient into a mental state of economic and medical decision trees based on how much risk the patient is willing to accept for the unknown. As an expert in the medical field, the duty of the physician should be to provide the patient with information required for the patient to make informed decisions on the amount of risk they are willing to accept of the unknown. That means the risk of delayed or missed diagnosis should be born by the patient, based on how much risk they are willing to accept. And that risk should be determined by how much financial burden they are willing to bear.

Removing the threat of malpractice for delayed or missed diagnosis allows the physician to practice medicine based on sound medical principles instead of a selfish desire to protect their own economic self interests through defensive medicine. When you free a physician from the risk of economic suicide in the current malpractice climate, you free the physician from requiring them to practice defensive medicine. A practice built on irrational community standards of care, financed with an unlimited supply of insurance dollars. When you put economic forces into the equation you get a shared decision making process where ultimately the patient is able to decide how much risk they are willing to accept. And the physician does not feel compelled to practice defensive medicine.

The cost savings alone from this action would allow for a fund to be established to assist patients in need to pay for their health care bills. Billions of dollars in savings as defensive medicine disappears. A fund, not insurance, that would be available on a grant basis to pay for expenditures who's price is determined in the open market with transparency. Competition based on price, not price based on insurance dollars. If we insist on having others pay for minimizing risk, both patients and physicians, we will all bankrupt each other in a flaming ball of glory.

85% of Americans who have health insurance are quite satisfied remaining fully uninformed in the decision making process. I suspect that most insured patients choose not to be fully informed, opting instead for reducing their risk of the unknown by having others pay for it in a third party model. And physicians choose to over test to reduce their malpractice risk (either real or perceived), the cost of which is spread over millions of patients.

Whether third party is defined as private or government, the third party model is a destructive force as it prevents the overt rationing of a finite resource. All resources in every aspect of our lives are rationed, except health care. It is an irrational assumption that health care should not be rationed. Everything is. I don't believe we can ration health care from a position of central power. I think everyone needs to ration their own health care based on their own special needs and desires. The political will is missing to even attempt centralized rationing. But even if it was, I don't believe that centralized rationing would be capable of showing significant cost controls. It must be the patient who ration's himself based on the value system of their own self interest.

Supply and demand is determined by market forces. The supply and demand curve of an unlimited resource will price it to a value of zero in an open market situation. If the demand is unlimited, the price will be valued towards infinity for a finite resource. What we currently have is a finite resource with unlimited demand. A demand that is artificially created by a third party system that operates on the assumption that supply is unlimited. For 50 years, the centralized pricing system has failed to find an appropriate pricing model that is sustainable. The reason being is it doesn't exist. At least not a sustainable model. Only the open market can match buyers and sellers of goods and services and find a price that works.

With all that said, let's go back to my 35 year old with shortness of breath. How does the work up differ between a patient with insurance that pays for 100% of the cost vs a patient who pays 100% of the cost?

1. The patient has insurance that pays for everything. If you are a physician worried about malpractice risk, you will over test. The patient will get labs, EKG, CXR, probably a CT chest, perhaps an echo. The patient will likely get a prescription for antibiotics. There is minimal downside risk of malpractice exposure for a physician to do more in fully insured patients. And patients accept more testing as a way of minimizing the risk of the unknown. And the whole process is paid for by spreading the payment out over millions of other premium paying customers. Patients turn a blind eye of responsibility for the costs incurred by the testing, as do physicians, both for their own selfish reasons.
2. What if the patient had no insurance? What if the physician was allowed to freely discuss their thoughts, probabilities, likelihoods and concerns without worrying about their own selfish desire to minimize malpractice risk? What we should see is more conversation between physician and patient regarding the risk of medical disease combined with an economic analysis of the situation. If the patient was bearing the brunt of the cost, and accepted the risk of unknown based on a thorough informed consent process regarding testing options, cost, probabilities, clinical suspicions, they could decide how much testing they wanted to pursue. And say no to over testing. And physicians would not feel obligated to pursue low probability high cost testing. My short of breath patient may accept pleuritis or anxiety as an acceptable diagnosis and defer more aggressive testing with CT scans, echo's and Doppler's in favor of conservative management. The physician will not feel obligated to order everything, but rather feel obligated to discuss their clinical opinion on the likelihood of pathology being present.
   

Being able to discuss my clinical opinions with patients based on the probabilities of disease being present or absent is quite satisfying. By putting patients in control of their economic destiny, they have the ability to ration their own health care and save our country from the current course of economic disaster. If patients understand that their own financial and medical welfare is at risk by smoking, drinking, eating poorly and failing to exercise, that they have within their power to make changes in themselves to minimize their economic differential diagnosis, we may be able to have real reform in how health care is delivered. The way I see it, insurance is a root cause of defensive medicine by creating an unsustainable demand curve that is met with ever greater supply. We are on a course of economic suicide.

For any sustainable model to be achieved, there will have to be large component of personal financial risk involved. Only then will overt rationing price health care in a way that can sustain it. We need the ability to generate economic differential diagnoses in order to self ration the care we deliver. We need new decentralized, innovative concepts for the self rationing delivery of health care. How to achieve that? That's where the money is.