The Real Story on Self-Dealing in Healthcare
The Oklahoma Council of Public Affairs passes on this quote from the late, great Joseph Sobran:
“What puzzles me is why journalism should be so reflexively on the side of government. During the Watergate era, we heard about the ‘watchdog press,’ the ‘adversary press,’ the press as the ‘fourth branch of government.’ That old skepticism about government, largely illusory then, hardly survives today even as a pose. Today the press seems to see itself as government’s partner, assisting and promoting the expansion of the state. The only politicians it treats with skepticism, verging at times on open hostility, are those who try to put the brakes on government. You might think that after a century of tyranny, total war, genocide and mass murder, not to mention organized robbery through taxation, inflation, debauched currencies, and redistribution, all of which have generated more corruption and social decay—well, a little skepticism toward the modern state itself is long overdue. But the news media still persist in the faith that government is the natural instrument for the betterment of the human condition.”
As I read this it occurred to me that while the modern state and its crimes and folly tend to get a journalistic free ride, any individual even suspected of committing any of the same acts or crimes makes headlines. One of the concepts I encountered when first reading the classical liberal scholars was the notion that the “state” should not be allowed to do anything an individual could not get away with. In short, if an action is considered a crime by an individual, that same action should be considered criminal for the state. This restraining concept, perhaps more than any other, serves to limit the scope of government to a more proper role.
It also occurred to me that while the modern press makes headlines with the possible conflicts of interest physicians may have owning the facilities in which they work and to which they refer, the same journalists look the other way as self-dealing hospitals account for 60% of personal bankruptcies in this country. The gravity and depth of the conflicts of interest present in the every day corporate hospital dwarf the worst examples of physician conflicts to which you could point. After all, if you were trying to make money by self-referral, which would you rather own, an MRI machine, or the doctor and the MRI machine? Which would you rather own, the hospital, or the doctor and the hospital?
Are there doctors who own MRI machines who are by virtue of this arrangement more likely to order an MRI? No doubt they are here and there, ordering the studies that are indicated and a few that are not. The price of these MRI’s are almost without exception, however, the lowest in town, wherever you look. Are there hospital employed doctors who are told to order more MRI’s by their boss? Duh. This overutilization pressure is widespread and standard operating procedure. These hospital MRI’s are, by contrast, the most expensive studies in any town or city you might examine.
What is more damaging? A few doctors who think they can get away with ordering a few unnecessary MRI’s for a low price, or widespread and institutionalized overutilization and abuse of high-priced hospital MRI units? Which of these situations gets the most press? Which of these situations is likely to worsen, the physician owner who acting unethically constantly runs the risk of ruining his reputation and practice by acting in this manner, or the physician employee, who out of fear of his job, orders as many MRI’s as he is told to by his boss?
Conflicts of interest seem to have escaped the notice of lawmakers, as well, when pertaining to the giant hospital interests, while the very name “Stark,” referring to the California ex-congressman, strikes fear in the hearts of many doctors, as this man made a career of restraining physician entrepreneurs, all to the giddy applause of his hospital crony pals. “Stark” laws have served to regulate the manner and the extent to which physicians can own medical facilities in an ostensible effort to curb self-referral abuses. Hospitals in the meantime have been hiring physicians whose various diagnostic and specialty referrals are thereby controlled and funneled to their employers' institution, representing self-referral abuse on steroids. Exhibiting perhaps the ultimate conflict of interest, many giant hospitals have started their own health insurance companies, another massively corrupt story and missed opportunity by modern media.
Perhaps the crimes of the “state” and the gross hospital conflicts of interest are less noticeable or offensive due to their anonymity. The press actually provides cover for institutional abuses by headlining an individual physician as a “self dealer,” as this provides a useful distraction for the wildfire of entrenched hospital “self-dealing” going on right in front of our face.
The ultimate in self-dealing occurs, of course, in Washington, D.C., the Unaffordable Care Act representing perhaps one of the most gross examples of this “pay to play” game. It is always important to remember that the only thing worse than unethical businessmen and tyrannical government is when the two work together generating laws like Obamacare, a law that will make corporate medicine even richer and grant unimaginable power to would-be tyrants. Keep in mind that this law prevents the construction or expansion of any physician owned hospitals. Keep in mind that this law will result in bundled Medicare payments to the hospitals, from which the doctors will be paid an increasingly smaller portion . Keep in mind that private practice physicians will be paid 40% less than their hospital-employed counterparts for the same services. Keep all of this in mind when you read a front-page account about some individual doctor accused of self-dealing.
Just as the crimes of individuals pale when compared to those of the “state,” the conflict of interest issues of individual physicians (while making great headlines) pale when compared to the well-established and institutionalized self-dealing of the big hospitals. It seems obvious to me that the best way to deal with ownership conflicts of interest in health care would be to prohibit hospitals from employing doctors. That no lawmaker has ever suggested this demonstrates, I think, that the gang in D.C. means to protect their hospital pals more than they wish to curb any abuses of self-referral. Is the press really missing this or are they just looking the other way? After all, if it isn't ok for doctors to own hospitals, why is it ok for hospitals to own doctors?
G. Keith Smith, M.D.
