Wednesday, October 7, 2009

I've Got No Choice: Medicare Billing Perversities Will Force Me to Bilk the Public

At risk of being uncouth, there appeared today in the New York Times a letter to the editor by Dr. Richard Bazarian of Portland, Maine, that I found rather curious. Dr. Bazarian opined that the capricious decisions of medicare bureaucrats portend disastrous consequences under national public health insurance.

A foreshadowing of what is to come under government-led health care reform: An anonymous Medicare bureaucrat decides to change the billing code for a $30 drug so that physicians are reimbursed only about 25 percent of their cost. The annual savings nationwide: about $11 million.

Unintended consequences: The ophthalmologists who had been offering the drug, Avastin, off-label are unwilling to take the loss, and justifiably recommend that their patients switch to Avastin’s sister drug, Lucentis, which costs more than $2,000 per monthly dose. The annual cost to taxpayers: hundreds of millions of dollars.

In other words, an eye doctor stands to eat 75% of $30--$22.50-- each time he prescribes Avastin to a patient. Divided up, the $11 million estimated national savings reflects about 489,000 annual prescriptions of Avastin. Remember that number.

What's a rationally operating capitalist physician to do? Why, refer his patients to a drug that is sixty-six times as expensive and recoup all of the cost. At 489,000 prescriptions a year, that would translate not to "hundreds of millions of dollars," but nearly a billion. Of course, Dr. Bazarian magnanimously offers his patients a choice:

Today, an average day in my office, of 14 patients to be treated, 8 were scheduled for Avastin and 6 for Lucentis. When shown your article, all agreed to change to Lucentis. While they would like to be socially responsible, they don’t want to see their physician lose money on their treatment.
An uncouth person might suggest that a doctor has undue influence over his elderly patients, who are likely experiencing some anxiety over their impending blindness. Since these patients have no personal financial stake in the prescription decision, while the prescribing physician does, an uncouth observer might also point out the presence of a conflict of interest. An uncouth observer might also speculate that Dr. Bazarian and his colleagues, were they to express in writing this particular situation to their Congressmen or Congresswomen, or to the professional associations to which they belong, might have some influence to produce a productive remedy without resorting to an apparently spite-driven recourse of screwing Medicare.

A really uncouth person might engage in basic math and assess the outcomes of this typical day. Dr. Bazarian presses his elderly patients to adopt the name-brand drug in order to avoid harming the nice doctor who is helping them to retain their sense of sight. How does it work out for Medicare? Instead of (8*$4.50)+(6*2000)=$12,036, Medicare is on the hook for 14*$2000=28,000, a net loss of $15,964 . As for the doctor, by shifting eight patients to the name brand drug he saves himself $180. A spectacularly uncouth person might ask of Dr. Bazarian what he intends to do when his individually rational actions, replicated by his colleagues across the country, have the predictable systemic consequence of bankrupting Medicare and his pool of clients dwindles to the independently wealthy sufferers of macular degeneration in southern Maine. Might the doctor inquire of one of his Senators whether some sort of systematic overhaul of the health financing system might alleviate this one bizarre incentive? Might the doctor participate with others in an effort to remedy a procedural fault in the system that creates a perverse incentive? Might the doctor, to use the unfortunately coarse parlance of our times, suck it up and take one for the team, as most people in these troubled economic times have had to do? After all, the fact that the doctor claims to have offered his patients the final decision suggests that he recognizes the basic absurdity of his position, that his potential individual loss of an Andrew Jackson should outweigh the public interest of saving two large. It's not as though he has any choice in the matter. His patients insist that he give them the most expensive drugs the taxpayers can buy.

As a gentleman, however, I find it absolutely reprehensible that an honest physician would be forced by the absolutely irresistable power of perverse economic incentives to inflict eighty-three fold on the taxpayer the losses that public insurance would inflict on him, and therefore am swayed by the sheer power of this isolated anecdotal argument to reject the public option entirely.

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