Sunday, September 16, 2007

Three Interesting Articles

The recent changes in imaging payment as proposed by CMS have brought about a lot of discussion. Today, three articles pertinent to the discussion were referenced in the "Daily Scan", a newsletter from the RSNA.

The first is excerpted from the Wall Street Journal. Author David Armstrong has often dealt with the self-dealing issue, and in today's Wall Street, he reviews Medicare's apparent targeting of the practice. He notes several projects that have been derailed by the new thinking, such as this:

In February, a group of cardiologists in Gainesville, Ga., announced they were building a diagnostic heart center in an $18 million joint venture with the local hospital. Last month, they said the project was dead. . .

. . ."A lot of people have just called a time out on these deals," says Daniel Mulholland, a Pittsburgh health-care attorney who has advised hospitals on such investments. "The party is over. . ."

The reason? Federal Medicare officials want to crack down on arrangements like the one that was planned in Gainesville, where doctors refer patients to businesses in which they have a financial stake.

In recent years, many physicians have become wealthy by investing in magnetic resonance imaging, or MRI, facilities, surgery centers and diagnostic sites -- and then sending their patients to them. A recent McKinsey & Co. study pegged doctors' profits from this practice, known as self-referral, at $8 billion a year.

His assessment of the new CMS proposals:

. . . tough new restrictions proposed by the federal Medicare authority. . .would essentially ban Medicare payments for many self-referred services. In unusually blunt language, the Centers for Medicare & Medicaid Services said the self-referral arrangements are "creating incentives for overutilization and corrupting medical decision-making."
What else is there to say? Well, a few graphs from the article tell much of the story. See any trend?

It goes with what I have been saying for a while. Imaging spending is skyrocketing, having doubled in the last several years. Of this, Armstrong notes that $8 Billion goes to self-referral, although other sources have pegged this at $16 Billion. He does note that the glaring loophole known as the in-office exception remains in place.

The second article comes from Capitol Hill, via's Jeffrey Young. It seems that our friends at the big imaging companies are starting to worry about their bottom line, and are lobbying the White House to turn things around.

GE Health President and Chief Executive Joseph Hogan and other imaging company officials gathered at the White House Monday for an audience with presidential advisers to press their case that their industry is being asked to bear an unfair burden as Congress and the administration look to rein in Medicare spending.

Lawmakers have set their sights on imaging spending in particular based on evidence that spending doubled in the first five years of the decade.Trade groups representing the companies are engaged in a push against additional regulations and legislation that they say will threaten Medicare patients’ access to the innovative, but expensive, technology.

Sound familiar? It should. . .

“We acknowledge there’s a growth in the sector. We don’t necessarily agree you can equate that growth as bad,” said Amy Jensen Cunniffe, director of government relations for the Advanced Medical Technology Association (AdvaMed).

AdvaMed is one of three trade groups leading the charge against the imaging cuts, along with the National Electrical Manufacturers Association’s Medical Imaging and Technology Alliance division, and the Access to Medical Imaging Coalition, which includes industry, physician and patient groups.

Yes, they are working side-by-side with NEMA and AMIC. All three are still pushing the same agenda suggesting that cutting back on machine expenditures will limit patient access to sophisticated scans. I have yet to hear that DRA-2005 has harmed or significantly inconvenienced even one little old lady. Some self-dealers and enterpreneurs, maybe. And of course GE and Siemens. But not Granny.

The final article of the treo is from the AP newswires, and it may be the most ominous of the bunch. "Health care premiums rise 6.1 percent," writes Emily Fredrix.

The increasing cost of health insurance is putting coverage out of reach for many small to midsize companies and their workers, even though the rise in premiums this year was the lowest increase in eight years. Since 2001, the cost of premiums has gone up 78 percent, far outpacing a 19 percent increase in wages and 17 percent jump in inflationaccording to a survey released Tuesday by the Kaiser Family Foundation, a health care research group that annually tracks the cost of health insurance.

"There's no scientific tipping point that you can point to at which health insurance becomes unaffordable," said Drew Altman, the foundation's president and CEO. "But it does seem like we've crossed a threshold where health insurance is increasingly unaffordable for medium-sized employers, particularly smaller employers and average people this year."

We have been treating the healthcare money pool as endless, that another dollar can always be printed to cover this cost or that. I think we have just discovered the bottom of the pool, as we rush headlong toward it after a high-dive.

As an aside, I am certainly not letting the insurance companies off the hook. They have a lot of questions to answer on how we got where we are, while they add considerable wealth to their coffers. My son has a chronic disease, and recently generated a $14,000 bill for diagnostic procedures. Because our company hadn't made a "good deal" with our provider, I'm going to pay at least $4,000 of this out of pocket. I can afford it, thank Heavens, but what about someone who can't? And this is with paying a rather high premium for group coverage.

The hemorrhaging and wasting of money cannot go on, and CMS is in the lead to staunch the bleeding. I'm not going to anoint them as saints just yet, however, as their ambitions are not necessarily to keep things honest, but in the words of the Monty Python Blackmail Sketch: "No, no, sir, it's alright, we don't morally censor, we just want the money." They have observed the huge flow of cash into imaging, and they are going to tap it. Nothing personal.

I once had great respect for the equipment companies, who invest zillions of dollars to build the latest and greatest of scanners. We all benefit from this, especially our patients. But does this end necessarily justify the means of selling an excess of scanning capacity by pushing machines in venues where they really aren't required? I have to think not. But it's pretty clear that this party is about over, and the question will shortly become moot. Especially if Hillary wins, and Rush Limbaugh says there is an 80% chance of that.

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