You ever wonder what life would be like if physician risk management expectations were applied to the investment adviser community. I have blogged extensively about why standard of care is an irresponsible measure of the threshold for determining negligence in medical care. Imagine for a moment what capitalism would be like if your physician risk management expectations were applied to your investment adviser, who was sued every time your investment value went down. Imagine what life would be like if your adviser risked civil liability every time a bad outcome occurred. What if no laws were broken? What if an after the fact determination of negligence was based on a bad outcome? What would physician risk management expectations do to the investment community? It would destroy them.
Imagine if investment advisers every where had no idea what actions could place them in civil court. Imagine following all the rules of the SEC. Imagine discussing every investment appropriately with their client. Imagine never knowing whether an investment gone bad would allow their clients to sue them for every thing they had.
How do you imagine investment advisers would react? What you have here is the quandary physicians find themselves in every day. The physician risk management expectations could never be applied to the real world in any other field and get away with it. What we have in the current state of affairs, is a standard of care established on irrational fears and the possibility of civil action every time a bad outcome occurs. How well do you think investment advisers would function in a world where every financial recommendation they made left them open to civil liability for a bad outcome?
There would be no banking system. There would be no brokers willing to risk their personal financial nest egg to sell risk to investors. Capitalism as we know it would cease to exist.In fact, trying to export physician risk management expectations to any other professional field would be catastrophic.
If brokers were sued every time a stock went down, you'd find fewer brokers willing to sell risk and more brokers doing everything to protect their own personal interests. They may only recommend the most conservative of investments. Perhaps they would only offer FDIC backed money market accounts . Or perhaps US Treasuries. Their ability to sell risk would disappear overnight. And with it would disappear the ability of capitalism to thrive. The most conservative options would prevail. And the reward for risk would disappear.
Capitalism works because risk is rewarded greatly when it succeeds. It is also punished heavily when it fails. That is, until the government steps in and rewards too much risk by preventing failure. With out the risk of failure, there is no downside to too much risk. Too big to fail is a government generated scam. Some companies become too big not to fail. Allowing bad companies to survive under government handouts prevents smaller more mobile companies from taking their place. What our government does by saving bad companies taking on too much risk is codify survival of the worst while preventing companies that did everything right from thriving. It's the worst of both worlds. The bailout of the century is the scam of the century. Our government has set us back decades on the road to recovery.
Physicians are in a unique situation. Unlike capitalism, which rewards and punishes risk, physicians carry all the risk and none of the reward for generating systemic risk. A risk defined by increasing variables of the unknown. Physician risk management is all about reducing the unknown variables at all cost. And in a third party system where the cost of reducing variables is born by someone else, physicians will always error on the conservative side of risk management. By being punished for bad outcomes and failure to diagnose, priority number one for physicians will always be to minimize risk, and by default, minimize the unknown variables.
Physician decisions will always be based on the most conservative plan. I see this every day when $10,000 lab and xray workups are ordered for simple medical conditions to exclude other conditions. That means generating large amounts of data to minimize the likelihood of a missed diagnosis, and by default, risk. That means gathering the most data one can to minimize the number of unknown variables, because risk in American medicine is defined by the number of unknowns you have in front of you.
For physicians operating in a third party fee for service system, there is nothing but upside to conservative management, or the reduction of risk. If you have chest pain a heart cath eliminates the unknown. If you have astham dyspnea, a V/Q scan eliminates the unknown. If you have hepatitis, a liver biopsy eliminates the unknown.
In a medical system that punishes physicians for generating risk, yet generates no reward, the only acceptable standard of care in a community is often that which generates the greatest amount of care. This over riding personal desire of physicians to reduce their exposure to risk by generating data to reducde the number of unknown variables is driving the ability to finance our health care system into a storm on the horizon.
Today I followed up on 50 data points ranging from cultures and laboratories to pathology biopsies and radiographic scans done in the last two weeks of my inpatient duties. Exactly zero out of fifty data points changed my management decisions. But the risk was reduced dramatically had anyone of them been abnormal and a patient had a bad outcome from failure to diagnose.
Unlike capitalism, in medicine risk is punished but not rewarded. There is no upside to generating risk. By reducing unknown variables, physicians can reduce their risk. Unfortunately, the cost of reducing that risk is not burdened on the back of the patient or doctor, but rather in the rapid rise of premiums year after year through unsustainable health care inflation.
Ultimately, unless you change the formula for paying for risk, or generate some kind of reward to physicians for generating more risk, or shield them from civil liability for increasing systemic risk and reducing cost simultaneously our care in America will always be driven by the desire to generate the most data and reduce the risk of the unknown. One need only think of investment advisers functioning in the same environment as physicians to understand why we are doomed for failure under the current rules of the game.
