Doctor Caused Healthcare Cost Increases: Managed Care 101 in 2010 (Part VIII)

December 17, 2008

Highly respected medical institutions estimate that 750,000 Americans traveled abroad for care last year and 6 million a year will venture outside the US by 2010.

"Your own reason is the only oracle given you by heaven, and you are answerable not for the rightness but the uprightness of the decision." - Thomas Jefferson

“Americans have long been willing to leave the country for bargain face-lifts and cut-rate dentistry. But now the availability of top-notch medical services at low cost is enticing a growing number of U.S. patients to developing nations for more sophisticated procedures [such as] elective surgeries for ailments that aren't life-threatening [and increasingly] for more serious conditions, including heart maladies and cancer.”

While offshore firms are already handling our medical records and reading X-rays, and Johns Hopkins and others such as the Joint Commission International are getting footholds abroad, estimates (Deloitte & Touche’s Deloitte Center for Health Solutions) are that 750,000 Americans traveled abroad for care last year and 6 million a year will venture outside the US by 2010. Everyone is aware that there are a lot of foreign-born, US-educated doctors practicing here. You may not be aware, however that these same doctors, like the fattening of immigrants within in two generations, are demanding comparable salaries to those who have gotten all of their training here. “Add a rapidly aging U.S. population and a shrinking medical safety net, and the notion of Americans looking elsewhere for treatment no longer seems such a stretch.”

Now why is health care cheaper elsewhere?

• In some nations government-funded health care serves to help lower costs in private-sector hospitals who aren’t burdened with patient bad debt as US hospitals do.

• In other countries, often because they don’t have a tort system, malpractice insurance costs less. Also, litigation awards are significantly lower. But “consumers need to bear in mind in the event that something goes wrong, US patients who believe they have been harmed can sue the foreign doctor or hospital -- but only in that nation's courts.”

• Doctors earn less, but the cost of living is usually lower elsewhere.

(Dickerson Marla. “A guide for Americans seeking affordable medical treatment abroad” [Improving quality and bargain prices are luring US patients to developing countries for increasingly sophisticated procedures]. The Los Angeles Times, TICKET TO TREATMENT, Nov. 1, 2008.)

From: Yuu F., Sent: Sunday, November 02, 2008 2:29PM Fredrick:

I imagine this "untouchable" issue (high doctor salaries in US; 4.5 times the average household income, much higher than the ratio for other developed countries -- 2.0-2.9 times that in France, Germany, and so on) will have to be addressed if the current incredibly high health care costs in US, one of the reasons for high percentage of the uninsured or underinsured, cannot be reduced satisfactorily by emphasis on preventive care, utilization of information technology, etc., proposed by a presidential candidate.

From: Dr. Jeff Kaplan, Sent: Sunday, November 02, 2008 3:06PM

"Untouchable" because these assertions are naive - High doctor salaries may be justifiable, if the results are better, however public health data suggest we don't do as well as elsewhere. The point is to measure process and outcome and pay according to best performance, given case mix and patient compliance. Agree that there's little evidence that prevention pays off in less (avoidable) illness, but it is clear that knowing, monitoring, using standard evaluations and treatment regimens does improve the (measured) quality of care. Presumably, IT can help there.

From: Fredrick HS, MD, PhD, Esq, Sent: Sunday, November 2, 2008 7:06PM


You're missing the point! It is quite clear that the uniquely high US costs for medical providers are NOT associated with better outcomes. Quite the contrary! They are entirely the result of their political power and expectations. Paying imported doctors less than native ones is impossible in a society like ours (though I understand that computer companies do that with programmers from India. Doctors have more self-respect.)

Anyone paying his own medical costs for a non-emergent condition should certainly investigate medical tourism. But, if it makes sense for individuals, why wouldn't it make sense for insurers to encourage it as well?

I have recounted here before my experience about 15 years ago when a local orthopod recommended arthroscopic knee surgery (now shown to be ineffective) for a significant sum. I found a top-notch surgeon on Harley Street in London, whose price was 1/3. I told my insurer that they could pay my airfare and still save 50%. They refused. That was a stupid business decision. (I ended up not getting the surgery, and my knee is fine.)

Trotting out the placebo panaceas of "prevention" & "IT" merely distract from the basic problem. Paying doctors for "outcomes" merely means that no doctors will be available to treat the difficult cases. We have already seen how medical groups game the system to maximize their income under any payment regime. The day of the selfless, altruistic doctor won't return until college and medical school are provided free to all with the appropriate mental and physical capacity.

Increasing the supply of a commodity normally decreases the cost, but that doesn't work for doctors, since they can generate their own demand (e.g., a billable office visit to refill a prescription, a useless arthroscopic surgery). So any increase in supply of doctors would have to be accompanied by strict controls over self or circular referrals, and procedures of doubtful utility, with 2d opinions for expensive procedures.

From: Dr. Jeff Kaplan, Sent: Monday, November 03, 2008 6:06 AM

No, You’re missing the point: I said: “High doctor salaries may be justifiable, if the results are better.” And to prove that, you need 1) episodes of care - all care over time, regardless of setting, i.e., a longitudinal record, 2) case-mix or acuity adjustment (so that apples are compared to apples), 3) Incentives that do not encourage (and health care administrations that do not tolerate) underutilization, or the obverse, churning or doctor-induced, inappropriate demand, 4) payment for patient education, outreach, social services, monitoring and other relevant soft stuff, and 5) no financial barrier or 6) bureaucratic interference/burdensome paperwork, hoops to jump through or prior authorization procedures where specialty societies (not medical directors or P&T committees) dictate the standard of care, protocols and guidelines.

To my readers:

If high doctor salaries are justifiable when the results are better, how and what would you measure? How would you protect doctors from unfair measurement? And, finally, can this be done satisfactorily without an electronic medical record?