Concierge Medicine and appropriate incentives

Updated: Jun 13, 2020

For those of us who practice medicine there is a deep desire to make patients healthy. To end pain and suffering. It is the one passion in healthcare that unites us all. It comes from our hard-wired human instinct to care for one another, and has been woven into our code of medical ethics since Hippocrates. The optimal medical system should try to promote these noble instincts. It should reward practitioners that bring health to their patients. Unfortunately; there are many conflicts of interest in healthcare. Forces that distort the pursuit of health. Let us review some of them.

Fee-for-service incentives

The Fee-for-service model is the most common way to reimburse healthcare practitioners. Whether it is a neurosurgeon or an acupuncturist. Sadly, it presents a financial conflict of interest. The model reimburses for each visit and each treatment - not whether the patient is brought back to health. Even treatment failures and side effects can be viewed as positives, opportunities to charge for more testing, more treatments, and more office visits - a therapeutic cascade.

Consequently, the Fee-for-service model incentivizes quantity not quality; it leads to over-treatment and over-utilization. For example, studies show that fee-for-service surgeons are more likely to recommend and perform surgery than salaried military surgeons, and surgeons that own surgical centers are more likely to recommend and perform surgery than those who do not.

Another way to drive treatments and office visits is to make more diagnosis. In fact, the sicker you can be made to look, the better. More tests lead to more diagnoses; more diagnoses lead to more treatments; and more treatments lead to more follow-up visits. Patients end up being over-diagnosed - diagnosed with a disease that will not bother them during the course of their life. Over-diagnosis is particularly prevalent in cancer screening. Cancer can be found at such an early stage that many of them will not likely progress: examples include: prostate cancer, breast cancer, thyroid cancer, kidney cancer, and melanoma. Over-diagnosis is also prevalent in Functional Medicine and Naturopathy where many diagnoses are based on unvalidated tests from private out-of-pocket laboratories.

The sicker you can be made to look, the better.

Ultimately, the Fee-for-service model promotes both over-diagnosis and over-utilization. In the US, this is a major problem. Whether it is an Interventional Cardiologist treating heart blockages with unnecessary stents, or a Naturopath treating hypothetical disease with supplements sold directly from their office. For more information on this topic please refer to Dartmouth University. They have been studying trends in healthcare utilization since the 1960’s through the Dartmouth Atlas Project.

Industry amplifies conflict of interest

To make things worse, the industries manufacturing the tests and treatments play an active role in enticing doctors to use their products. They include: laboratories, imaging centers, pharmaceutical companies, supplement companies, therapy centers, and device manufacturers. The pharmaceutical industry alone spent $60 billion marketing to doctors in 2008.

At times, this marketing can take the form of indirect enticement such as: advertisements in medical journals, visiting pharmaceutical reps, paid lunches, sponsored meetings, and pens. At other times, it can take the from of more direct compensation, such as: paid consultancies, paid lectures, and paid research. In 2014, 681, 432 US physicians were paid $2.5 billion by 1630 companies.

This is not money wasted. Observational studies show that doctors are far more likely to prescribe a pharmaceutical company's drug after exposure to their marketing.

Doctors are far more likely to prescribe a pharmaceutical company's drug after exposure to their marketing.

Experts with conflict of interest

Even academic institutions are not immune to conflict of interest. For example, it was uncovered in 2018 that department heads at Sloan Kettering were paid millions of dollars by the pharmaceutical industry. To make matters worse, they neglected to disclose these conflicts of interest in their academic papers.

It turns out, this is not a rare occurrence. These academic physicians make up the expert panels that draw up guidelines for medical practice. Random surveys reveal that 75% of expert panel members have a financial conflict of interest.

75% of expert panel members have a financial conflict of interest.

This is particularly dangerous and alarming. Guidelines are very important. The rest of us depend on guidelines to tell us how to practice medicine. We rely on the architects of these documents to be incorruptible. Obviously they are not.

The Sunshine Act

Regulators and governments are finally starting to acknowledge this problem. The Sunshine Act of 2013 makes public knowledge any payments to doctors from pharmaceutical companies and device manufacturers. Search their database to check how much your doctor or surgeon has been reimbursed. Alternative medicine doctors, with out-of-pocket testing and services, are currently exempt from this scrutiny; without regulation it's possible they receive even more compensation from industry - its hard to say.

Medico-legal pressures amplify conflict of interest

Compounding the above problems is yet another source of conflict of interest. The threat of medical malpractice. It drives over-diagnosis and over-utilization even more. This is due to a practice termed "defensive medicine". The number one reason for a malpractice claim is failure to diagnose. Doctors react by practicing more aggressively, ordering more tests, leading to more diagnosis, and more treatment.

The number one reason for a malpractice claim is failure to diagnose.

A solution in primary care

I am not trying to vilify any healthcare professionals or other players involved in healthcare. All of the players involved are just responding to the incentives - poorly designed incentives. Trying to change the incentive structure for all the players, may not be a practical, or even enforceable. It would entail regulation of marketing, reform of academic institutions, regulation of alternative medicine, tort reform, etc. Instead, a more pragmatic solution for conflict of interest lies in primary care. As long as your main doctor has no conflict of interest, they can safeguard you against the rest of the conflicted system.

Appropriate incentives with the Pay-for-performance model

The Pay-for-performance (P4P) model or Value-Based Reimbursement model, is an innovative way for reimbursing primary care doctors. It incentivizes good patient outcomes. The more healthy the patient, the more the doctor is reimbursed, regardless of how many visits, tests, or procedures are performed. It aligns the financial incentives of the doctor with the goals of the patient. Large healthcare organizations and the NIH are studying the merits of this model. in fact, real world studies are promising and show that it leads to better patient health.