How Much are Misaligned Incentives in Health Care Costing Tax Payers?

On Christmas Eve, I took care of a patient who had just undergone surgery for an infected artificial shoulder. He was to be discharged on intravenous antibiotics three times a day for six weeks. This is a pretty common treatment. Patients are generally able to give themselves this medication with the help of a home care nurse who visits once a week. The total cost of this is approximately $7000 for nursing visits, antibiotics and supplies ($120 per visit for eight nursing visits plus $143 per day for antibiotics)

The social worker informed him that Medicare would not pay for home care nurse visits or supplies. BUT, Medicare pays for inpatient rehabilitation, which he would be eligible for to receive these antibiotics. Given the choice of paying $7000 for home administration versus $0 for inpatient rehabilitation, naturally he chose inpatient rehabilitation.

The problem is, is that his inpatient stay costs taxpayers approximately $21,000. $350 for room and board plus additional costs for antibiotics and supplies, totaling approximately $500 a day. Furthermore, although he was well enough to be discharged home before Christmas, he needed to stay until he could be placed in rehab. Because of holiday scheduling, most rehabilitation facilities were not accepting admissions. Thus, he had to stay in the hospital an extra four days in the hospital over the weekend and holidays. Given that the average cost of a hospital stay is $2338 in Maryland that added an additional $9352 or so of unnecessary expenses.

In sum, because financial incentives encouraged my patient to spend $0 rather than $7000 out of pocket, Medicare spent an unnecessary added $30,000 on his hospitalization and care.
To make matters worse, my patient didn’t even want to go to rehabilitation. He preferred to administer the antibiotics himself at home and found it hugely inconvenience to have to be an inpatient for six weeks just for antibiotics. He was a small business owner, and these extra days in rehabilitation would hinder his productivity at work. He was upset that he had to stay in the hospital over the holidays for unnecessary reasons. He was upset about this twisted logic, which forced him to choose the less resource efficient option and lamented the financial burden he was unwillingly imposing on taxpayers.

This decision would harm my patient in other ways. Medicare limits beneficiaries to sixty lifetime days of inpatient rehabilitation care, so if he ever needed future inpatient care, he would have fewer days available to him. Staying in a hospital facility can also be harmful medically, as added days in the health care setting place him at increased risk for health care acquired infections.

The United States has been in recession for years and calls for fiscal responsibility ring loudly. Fiscal crises and congressional deadlock have almost become the new normal. Rising health care costs account for 25% of total federal spending and stands at $2.8 trillion a year. This contributes a significant portion of our national debt at a time when we can’t afford wasteful spending.

The Affordable Care Act has attempted to curtail waste through various mechanismsincluding redirecting care from high cost specialists to lower cost primary care doctors, restructuring reimbursement from fee for service to a value based model. Others have suggested various cost cutting mechanisms such as reducing overtreatment, implement market-based incentives, and reduce overhead.

My patient’s situation illustrates another aspect of potential cost control that has not frequently been discussed. Skewed financial incentives caused by illogical Medical reimbursement schemes create additional unnecessary costs that are not just wasteful, but also harmful and inconvenient to patients. $30,000 is a great deal of money to waste on something that is medically unnecessary and unwanted.

This is but one example where misaligned incentives drive providers and patients to choose the less efficient, more wasteful option. Examples are abound in health care. Patients in New York regularly told me that they called an ambulance because it was cheaper to them (free!) than a $20 cab ride. An ambulance ride in New York City costs $704 per ride not including mileage. Medicare and Medicaid contribute approximately half of the FDNY’s total revenue of $205 million yearly.

I remember referring one of my clinic patients to the social worker because she had recovered from depression and wanted to get a job. The social worker discouraged her from finding employment and instead advised her to volunteer because she would lose her disability benefits if she found gainful employment.

Because uninsured patients do not have outpatient drug coverage, it is not uncommon for uninsured cancer patients to be admitted to the hospital in order to get outpatient chemotherapy infusions. This adds approximately $2338, the average cost of an overnight admission, on top of what would have been an outpatient infusion.

I could go on and on.

Policy changes that systematically reform these misaligned incentives could do much to reduce illogical decisions that cause wasteful healthcare spending. Lobbying and patchwork legislation have led to our current system of fragmented reimbursement schemes where benefits initially meant to help patients, create unintended consequences leading to wasteful spending. Long-term solutions to counteract our increasing federal deficit require bending the cost curve of health care. Taking a careful look at Medicare reimbursements that don’t make sense could potentially save millions of health care dollars and improve quality of care.

Special thanks to Donald List, LCSW-C, for assisting with obtaining the costs of the therapies and services mentioned in this article.

Originally published on on February 23, 2013


The Hippocratic Paradox: When Is Resuscitating a Patient Doing Them Harm?

A 52-year-old woman came into our hospital in New York bleeding to death.

She had advanced stage throat cancer. Her tumor, on the left side of her neck, was both pushing into her airway and a major artery. As the tumor grew, the woman could no longer breathe, and when her artery ruptured, blood started pouring into her lungs.

She would die by drowning in her own blood.

Her husband was understandably overwhelmed and distraught. He instructed us to take any measures possible to keep her alive. She was too weak to contradict her impassioned and dedicated husband.

This was, in my view, the wrong choice from an ethical and clinical perspective. How could I uphold my oath to do no harm when I knew she would die a particularly gruesome death, and I was instructed by her husband to keep her alive and in this state? I would have to crack her ribs during chest compressions and electrocute her to attempt to restart her heart. Regardless of whether we could keep her heart beating, the rest of her body would still be irreparably consumed by cancer. It was anguishing to be forced to inflict this sort of violence on this dying woman.

Recently in the UK, a patient’s family took doctors to court claiming that doctors at the Addenbrookes Hospital ‘badgered’ Janet Tracey, a 63-year-old woman into agreeing to a Do-Not-Resuscitate (DNR) order and ultimately instituted it without the family’s permission. She had fractured her neck in a car accident shortly after she was diagnosed with terminal lung cancer. The controversy surrounding the incident spotlights questions of whether there is a legal duty to inform and consult patients on DNR decisions, and whether patients should have the right to demand resuscitation.

The courts decided the case should not go forward to judicial review, thus reaffirming that the decision to pursue CPR should be based on the doctor’s clinical assessment of what is in the best interest of the patient. I believe that it was the right decision. CPR is not always the life saving procedure that one typically sees on television. Outcomes in patients who are in the last stages of a terminal illness are extremely poor and prolonged oxygen deprivation during CPR frequently results in irreversible neurological damage.

The debates surrounding this case reflect a rightful demand for greater control in personal health care decisions and enhanced communication between the provider and the patient. But, as was the case with the woman in New York, I have seen countless situations in America where physicians are put in the ethically uncomfortable position of having to aggressively intervene upon a patient they believe have no chance of survival.

In the US, any decision to institute a DNR order must come from the patient, his family, or appointed surrogate. While this gives families a sense of control and decision making capacity over their loved one’s care, it also places a significant burden of guilt onto them. They are forced to make decisions that aren’t actually choices. I found it cruel to have to ask families already suffering emotional trauma to ‘refuse’ this useless procedure. Not only does it create false hope, but it also makes families feel as if they’re having to decide whether to give up on their loved one. When the end of life is inevitable, it is God or nature who decides, not doctors or families.

An essay by Ken Murray, an American physician, entitled ‘How Doctors Die’, resonated deeply amongst the American medical profession. He recognized that when it comes to themselves, most doctors do not want to be subjected to “futile” care. They know modern medicine’s limits and its ability to subject our loved ones to “misery we would not inflict on a terrorist.” Medical decisions to withhold CPR do not occur because doctors have given up, but instead from efforts to prevent unnecessary suffering at the end of life.

Unlike the US, here in the UK the ultimate decision regarding resuscitation lies with the doctor. The UK General Medical Council stipulates that doctors are not obligated to provide treatments at the end of life, including resuscitation, that would not be clinically appropriate or of overall benefit. This guidance reflects the position that these are clinical decisions; patients may not demand treatments that physicians believe would be futile or would not result in a meaningful prolongation of life.

The recent focus on autonomy over decisions at the end of life in the UK, through Tracey’s court case as well as controversy over the Liverpool Care Pathway, highlight the need for continued dialogue and clarity on these issues. The lawyers involved in the Tracey case have rightly affirmed that these decisions should not be made in the courts – a process that encourages suspicion and public anxiety.

Instead, we should work together to foster trust and confidence in the health care system, by encouraging conversations about resuscitation decisions at all levels. The NHS’s Dying Matters initiative has already pioneered efforts to change public perceptions of dying and counter unrealistic expectations. Future guidelines should be established through public consensus between practitioners who have professional expertise in this area and key stakeholders.

I feel that the UK is at a crossroads in much the same way that the US was several decades ago. High profile court cases surrounding patient rights at the end of life catalyzed a set of changes, which led to America’s current system of aggressive treatments at all costs regardless of futility or clinical common sense. I encourage my British colleagues to looking across the pond to the US as a cautionary tale of how these decisions impact our ability to serve in the best interest of our patients.

Published in the Huffington Post on January 18, 2013