Tag Archives: capitation

Notes on Lucre and Healthcare

Two recent articles show the influence of healthcare related industries on the provision of treatment.

The first is obviously scandalous. Scientific American reports on Dr. Scott Reuben. He evidently traded his professional integrity for rewards from the big pharmaceutical companies. As Scientific American puts it: “Anesthesiologist Faked Data in 21 Studies.” The result was “the sale of billions of dollars worth of the potentially dangerous drugs known as COX2 inhibitors, Pfizer’s Celebrex (celecoxib) and Merck’s Vioxx (rofecoxib), for applications whose therapeutic benefits are now in question.”

There are many unanswered questions in this story. One is how much Dr. Reuben was paid by the pharmaceutical companies. “Pfizer spokesperson Sally Beatty…was unable to provide information on the dollar amount of the grants.” And Baystate, the hospital where Reuben worked and carried out the studies, says that it “has no records of those payments and says that the research funds could have been paid directly to Reuben. Such an arrangement would be ‘highly unusual…'”

Another question is why it took 12 years for the hospital to perform a “‘routine audit’ [that] revealed Reuben’s widespread data fabrication?”

Still another question is the role of Pfizer in reviewing and vetting the studies. The same question holds for the peer-reviewed journals in which Reuben’s articles were published.

Reflect, if you will, on the “billions of dollars” that was needlessly, erroneously spent on those medications in the past 12 years.

This episode of malfeasance comes on the heels of the Dr. Fred Goodwin, formerly of The Infinite Mind which aired on NPR. (For those interested, you can read a rather rambling disclaimer from Alicia C. Shepard, the NPR Ombudsman.) Slate.com broke the story after Goodwin and three other physicians touted the benefits of Prozac and minimized the risk of some of the potential side-effects, including suicide, during an episode.

However, as Slate points out, “All four of the experts on the show, including Goodwin, have financial ties to the makers of antidepressants. Also unmentioned were the “unrestricted grants” that The Infinite Mind has received from drug makers, including Eli Lilly, the manufacturer of the antidepressant Prozac.” The incident caused something of a tempest and Goodwin is no longer host of The Infinite Mind.

Clearly, you want your doctor to prescribe only medications that are helpful and where you are clearly advised of the actual risks, benefits and side-effects. That cannot happen when money and quests for fame taint the process.

On another front, the scandal is less obvious but nonetheless still present. The New York Times published a story on March 15 about the costs of the health insurance programs in Massachusetts. They note that the costs of healthcare in Massachusetts are rising faster than the national average. Moreover, the healthcare program is “threatened first by rapid early enrollment in its new subsidized insurance program and now by a withering economy…”

A commission on payment reform was recently established. The Times reports that “The commission is looking at various options, but all would do away with the fee-for-service system, which provides perverse incentives by paying physicians and hospitals for each patient visit. The changes under consideration include reimbursing for episodes of care rather than individual visits and bundling payments to groups of providers who would together take responsibility for a patient’s health.

Blue Cross and Blue Shield of Massachusetts, the state’s largest insurer, recently devised an innovative model that pays doctors a flat fee per patient, with adjustments for age, gender and health status, and then adds bonus payments for high standards of care.”

Take a moment and read those last two paragraphs a second time, if you will.

The “solution” proposed is a capitation system that offers financial rewards for the briefest episode of care. Providers would not be reimbursed or would be otherwise penalized when dealing with patients who have treatment resistant or refractory conditions or disorders which require more treatment than the insurance companies’ algorithms suggest.

I am all for quick, efficient treatment. But I have seen the effects of capitation first hand. They are not good. And contrary to the Times opinion, it is not innovative. Nor do I consider it “perverse,” as the Times seems to think, that a provider should be paid for services rendered.

Do you really want your provider to be thinking in the back of his/her mind how they are going to explain to an administrator why they are scheduling another appointment for you, a statistical “outlier,” when the hospital, agency or practice is not going to be paid for that session?

Or do you want your practitioner to be first and foremost considering what is in your best interest?

Let’s recall Deep Throat’s advice back in the days of Nixon, “Follow the money.”

In none of the recent debates on healthcare have I heard discussions of limiting the salaries of health insurance executives, pharmaceutical employees or hospital administrators.

Yet I do relentlessly hear that doctors and direct healthcare providers make too much money. So let’s take a closer look.

First, as a point of reference, what is the total compensation of one of the most consistently profitable CEO’s in the country?  According to salary.com, Warren Buffet, the Oracle of Omaha, received $175,000 in 2008.

With that in mind, consider that, according to the Providence Journal, Lifespan President George Vecchione “made $2.9 million in 2006.”

Then there is Stephen J. Hemsley, CEO of United Healthgroup, who, according to salary.com received a total compensation in 2008 of $13,164,529.

Looking at the pharmaceutical industry, salary.com informs us that Henry A. McKinnell of Pfizer received a total compensation of $19,418,446.

Now, compare that to the average salary of a psychiatrist, according to allied-physicians.com,: $169,000.

The average for social workers in 2006, according to innovatorsguide.org,: $37,480.

A registered nurse with a bachelor’s degree working in a large agency or hospital in Rhode Island, according to salary.com, earns an average of $59,900 yearly.

And for a certified nurse’s assistant in the Northeast, salary.com reveals the yearly income of $25,700.

I leave it to the reader to determine where there is room for salary reviews and fiscal oversight and legislative mandates to help cut back on the high costs of healthcare while maintaining the quality of care.