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Wednesday, December 23, 2009

The Death Of In-Person Medical Conferences

The Death Of In-Person Medical Conferences

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Will the withdrawal of large financial resources from big pharma, which have historically supported medical conferences, occurring at the same time as the entry of large numbers of physicians who are facile with and comfortable with virtual meeting tools spell the end of medical conferences in the US?

Tuesday, December 22, 2009

Health care reform reality- they just can't make this stuff up

As details become available on the odd mix of compromises required to buy the votes of key senators, it becomes clear that the time line which has been the driver of this process is viewed in terms of days to weeks, not years to decades. There is essentially no priority on creating an sort of workable system in the long term.

How else can one view the incorporation of the provisions to provide specific sweetheart deals for specific states. There is a certain irony that Nebraska, a state whose motto is "Equality before the law", gets a deal whereby the rest of the country picks up the tab for the expanded Medicaid mandate. Who can or will be held to this promise? How in the world can this be constitutional? Why not just have income taxes accrue to those who live in states who voted against you if you have the votes to pull this off?

The odd and unjustifiable preferences go on and on. There is an excise tax on "lavish" plans except for 17 states (I wonder how many have democratic senators?). Is there a precedent for federal taxes levied only on selected states? Hawaii gets a pass on all of this. How does that work?

Medicare advantage is going away...sort of. However, Florida residents as well as some individuals in Pennsylvania, New York, and Oregon will be grandfathered out of being impacted by these cuts. What about equal protection under the law? Is this a dead concept?

I can't help but think of George Orwell's Animal farm. Everyone is equal but some are more equal than others. Harry Reid believes it is all about compromise. I am not sure that he entirely understands just what he is compromising. Perhaps he does.

Sunday, December 20, 2009

Regulatory blunt force trauma

I came across a very interesting series are papers published in the Journal of Legal Studies in June of 2001. They were a series of articles published on the impact of managed care and the papers were compiled by one of my "heros", Richard Epstein, author of Simple Rules for a Complex World. If you have not read this book, it is really worth a look.

The feature paper was by David Hyman and it was entitled "Health Care Fraud and Abuse: Market change, social norms, and the trust of reposed in the workman".

There were accompanying critiques which were critical of Hyman's analysis at some levels, but were in general agreement overall. The summary of the critique by Arti Rai sums things up clearly:

"... that health care fraud control is largely a catchphrase that is being used to divert attention from the much more difficult task of allocating health care resources in a manner sensitive to both cost and quality"

In the almost 10 years since these papers were published, there has been a major push to address the issues of efficient allocation and quality. That is the good news. We should be concerned with cost and quality. However, what tools are available to accomplish these goals. There appears to be a sentiment that the same sort of administrative tools which were deployed (with marginal success) to reign in "fraud and abuse" can be used to deal with quality and cost.

I know that the product of these interventions will focus on what can be readily measured. This data will take on a life of its own, being analyzed almost exclusively by those totally divorced from clinical encounters. While these measures will start out as surrogates for actual desired endpoints, they will quickly become the only endpoints that matter for reward.

Saturday, December 19, 2009

The Scientist : Promises, Promises

Must read on science and predictions

The Scientist : Promises, Promises

This article underscores the basic tension between being a skeptic, which is required for doing good science, and the advocacy which is increasingly required to convince funding sources that your science is worth supporting. Zealotry comes from true believers, something which should be hard to find in the scientific community.

Gaming behavior in Medicine

I spent much of the morning trying to find any writings on gaming behavior in medicine. There is only a very modest amount written on this subject. This is not surprising since there is essentially no upside to whomever would decide to undertake such a project. There was a study published in JAMA in 2000 (Wynia, et al; 283: 1858) which undertook a survey of physicians. They found that almost 40% would game the payment system in order to further the ends of their patients. While this raises all sorts of ethical questions, in my estimation it misses the more prevalent and less noble gaming opportunities.

I found a very interesting letter published on December 5, 1990 in JAMA (264:2742) sent in by Dr. Paul M. Allen discussing what was then the novel activity of unbundling". He astutely identified this as identifying an economic and not a medical activity. What was most striking was his realization that:

"The magnitude of the problem is illustrated by the fact that companies have been formed whose sole purpose is to teach physicians or their office staff how to code."

This was a very interesting letter which had two citations.The first was the 1990 CPT book published by the AMA. The second was George Orwell's Animal House. There is a message here.

Thus the norms in 1990 were that this development (the formation of consultant billing entities) was a problem, a far cry from the present state where not only is this not viewed as a problem, it is viewed as an essential business practice. As part of our residency assessment were are required to have this as part of resident education. In the span of less than twenty years we have gone from being mortified by a particular behavior to viewing it as required.

The lesson is that financial pressures over time can and will alter norms. Our actions will move toward where our rewards (mostly financial) are derived. We will ultimately rationalize our behavior to justify our actions.

How common is the gaming behavior which serves physician interests? I can only speculate in the absence of hard data. However, if you take the 40% number derived from the JAMA study, it is not unreasonable to assume that at least an equivalent percentage will game the system to further their own ends. Most of the gaming activities are neither illegal nor are they frowned upon by peers. Quite the contrary; over time they are increasingly viewed as essential aspects of practice, much like believing the cows were struck by lightning (see

Sunday, December 13, 2009

Hard wired gamers

The Wall Street Journal

DECEMBER 7, 2009

Miles for Nothing: How the Government Helped Frequent Fliers Make a Mint
Free Shipping of Coins, Put on Credit Cards, Funds Trip to Tahiti; 'Mr. Pickles' Cleans Up

Enthusiasts of frequent-flier mileage have all kinds of crazy strategies for racking up credits, but few have been as quick and easy as turning coins into miles.

At least several hundred mile-junkies discovered that a free shipping offer on presidential and Native American $1 coins, sold at face value by the U.S. Mint, amounted to printing free frequent-flier miles. Mileage lovers ordered more than $1 million in coins until the Mint started identifying them and cutting them off....

Complete story at

I just thought this story was so interesting at multiple levels. First it was illuminating in terms of human behavior and the genius of human ingenuity. There is little reason to hold those who devised the program for the US Mint accountable. Who would have thought ahead of time that this program would be "gamed" by people using the frequent flyer system? Even if someone involved thought of this they would be embarrassed to raise this as a concern. I can hear the conversation now.. "Don't be so jaded!!! Would you do such a thing?"

The truth is that most people would not think of this and if they did, the little voice in their head would tell them that perhaps this was not quite right to do. Whether or not most people would not do this becomes irrelevant in the longer term. Someone, somewhere had a eureka moment when they realized how to game this program and this particular someone had no problem testing out their hunch, which paid off handsomely.

This type of information always gets out and spreads almost like a virus. At first, there may be resistance because something does not feel right. Perhaps it is legal but given the fact that this was not what the program was intended for, most people will elect not to pile on board. That is just a temporary state. Over time as we see others exploit such opportunities, we tend to be less resistant being swayed by seeing what we think we have lost. We do not like to "leave money on the table."

You might ask what this may have to do with health care and the health care reform debate. The story was just about a small element of the US Mint and the exploitation of an obscure program by perhaps dozens of people. The difference between the US Mint and health care is that despite the name (US Mint), the real money is in health care. Within the present and proposed health care structure and innumerable "gaming" opportunities. Furthermore, there are entire companies filled with very smart people whose only job is to think about ways to game the present system and any proposed changes. When one of these people or entities has a eureka moment, the information spreads at the speed of light to armies of people who sole focus is to exploit the discovery and turn this into dollars in their pockets.

Oddly enough, the entities which seem to be outside this information flow are those entities which devise the ground rules. Perhaps they are not actually outside the flow, they are just not at liberty to respond in any time frame relevant to the real world. The net effect of this is the unintended consequence of the complex command and control structure is to create what amounts to be unlimited opportunities to the gamers. In other words, those who are rewarded most are those who, virtually everyone would agree at the outset, were those who displayed behaviors which, although not illegal, were the least emulatable when the process began. Over time, the consistent reward of these behaviors creates a world where they are no longer frowned upon, but in fact become the aspirations of the many.

If these behaviors actually created value for patients, this would be a virtuous cycle. Unfortunately, the hit rate for rewarding what should be rewarded and for pricing specific activities appropriately is not even close to ideal. You might ask for specific examples. Just listen to any advertisement for specific medical services. No physician or hospital system is going to advertise for services that lose them money. Look at durable medical equipment (scooters for no cost), medications advertised to the public, and a host of specialty procedures (gamma knife surgery, specialty orthopedic practices focusing on young people, sinus surgery, high end imaging, endoscopy, skin cancer surgery, etc).

I do not mean to imply that no one actually benefits from these services. Many patients do. However, the criteria for the application of these technologies ultimately becomes defined by those who game the system most aggressively. When there are tangible and immediate rewards for stretching the rules and no brake on this type of behavior other than individual ethical constraints, the ethical framework will morph over time. Behavior which would be viewed as unthinkable and unlikely at the outset becomes the norm.

Each round of state intervention in the health care market has created new gaming opportunities and there is no reason the believe that the next rounds will provide any fewer chances. In fact there is every reason to suspect that they will provide a bounty of opportunities unlike anything seen heretofore. We have an army of consultants and employed MBA's deployed with the charge of find the money. They are to a great degree unaware of and unconstrained by the nuances of medical practice. Their success is measured by the most measurable of metrics...dollars. Let the games begin!

Saturday, December 12, 2009

How could they have been so blind? Hindsight and Foresight

A recurring theme of human history could be termed "How could they be so blind!" This refers to the many events which led up to some sort of major human tragedy which in retrospect displays two common characteristics. First, there is virtually complete consensus that the events should and could have been avoided. Second there is disbelief that no one apparently stood up and intervened in some way to prevent the obviously undesirable events from happening.

The most recent event which could fall into this category is the housing bubble which collapsed in 2008 bringing upon us the worst financial calamity of almost 100 years. I think the lead up to the collapse and the forces which drove us to this state have broad implications outside of the housing market and actually have tremendous implications in health care markets as well.

Even in hindsight, it is very difficult to sort out what EXACTLY happened. That is not possible. The temptation is to identify who is at fault but the reality is virtually everyone is at fault by the nature of what we are and how we are individually motivated. In my estimation the financial collapse had its origins in the misalignment of incentives and an iterative process which, over time, consistently punished those who tried to act as voices of reason.

Specifically the mixture of undesirable tax advantages, unwise subsidies, ill-conceived legislation, and short sighted interest rate policies created an environment where individuals and companies made huge amounts of money doing really stupid activities. Those individuals who resisted jumping on board made what happened to be a bad financial decision in the short term, even though their decisions appear to be prudent in the longer term. Over time, those people who were more prudent either changed their minds or left the business, leaving only those with an outlook and perspective which fed the bubble and had disastrous consequences in the end. In the short to intermediate term, the feedback loops which operated basically punished only those who ultimately were vindicated. In the mean time they were dismissed and marginalized while the true believers were laughing all the way to the bank.

At any given moment of time looking back in time after a calamity happens, it is always easy to see the folly of certain activities. When events are unfolding, it is more difficult to to have the insight required, particularly when we find ourselves awash in a sea of rewards for doing what ultimately turns out is absolute folly.

You might ask how this relates to health care? In many respects health care now operates under a similar perverse mix of peculiar tax incentives, unwise subsidies, ill-conceived legislation which result in individuals and companies making ridiculous sums of money. Those in health care who raised concerns about thoroughly bizarre billing schemes and business practices find themselves in a position where they are in some sense acting irrationally. If you can legally bill and collect large sums for particular activities, why not preferentially engage and bill for these activities. Why would ANYONE leave money on the table? The environment which fosters such thinking has gone on long enough the effectively cull out anyone who resists buying into this culture.

The present business model is predicated on full exploitation of difficult to defend pricing and billing activities. No one wants to make the prices transparent since this activity will make the indefensible price structure obvious. However, the pricing and payments are transparent to those who provide the services. This results in aggressive promotion of high margin activities whether they are of particular value to patients or not.

All this may be obvious to those in the know, generally insiders in the health care industry. However, there is little incentive to speak or act since this would likely result in punishing only yourself. Thus the bubble will continue to grow and like the mortgage industry, the voices of reason will be culled out over time, leaving behind only those who will be blindsided. When the day of reckoning comes, we will all ask why don't anyone see this coming?