Tuesday, September 30, 2008

Self-Referral and the Bank Bailout

The big topic of conversation everywhere these days is the $700 Billion bailout of Wall Street, which so far has yet to be approved by Congress. Whether you are for the rescue operation or not, you will still be able to see some uncanny parallels between the economic crisis and the imaging self-referral issue.

The facts of self-referral are pretty simple. Because of the In-Office Exception of Stark II, doctors who own imaging equipment placed in their offices can order scans to their hearts' content, and collect technical fees thereof. Studies have demonstrated that giving out the keys to the cash-register leads to anywhere from two to eight times the number of scans being ordered. No one seems to be disputing that at all. The excess scans are costing you and me somewhere in the neighborhood of $16 billion per year. Not much dispute on this either.

I don't claim to be an expert on the mortgage crisis, but I think the main problem is pretty clear. Loans were given to people who shouldn't have qualified for them, and a lot of folks made a lot of money by treading on the line between what was proper and what was not. Because the whole thing was perpetuated by housing prices that could not sustain their rate of growth, the house of cards quickly fell over, right on top of all of us. Rightly or wrongly, President Bush and some in Congress attempted to bail the financial institutions out of their bad behavior. As of right now, the bailout didn't pass Congress, mainly because a large number of US citizens weren't for it, and they let their representatives know this in uncertain terms. Their main objection? The bill made all of us pay for the wild speculation and manipulation of a few, and it didn't punish those responsible.

I predict that once the public gets its collective mind around the self-referral issue, something similar will occur. Right now, patients are indoctrinated into thinking that their physician's in-office scanner is their solely for the patient's convenience. They do not realize that they are being taken for a ride by an authority figure that is manipulating them for their own profit, toeing a similar fine line between what is proper and what isn't. When they eventually wake up, I think there will be a significant backlash toward their beloved clinicians.

It has been said that those who sought loans without proper credit have some culpability in the mortgage crisis. Someone making a relatively low wage (or no wage) with no credit should not be thinking of buying a home. Patients also are at least partly to blame for the self-referral problem. Americans are addicted to imaging. When they go to their doctor or to the Emergency Room, they expect to be scanned for every ache and pain, and this plays right into the hands of those who would make a profit with unnecessary imaging.

So, who will rescue the country from imaging self-referral? Once again, the only real hope is the government. While DRA-2005 didn't properly focus on the self-referrers (and the ACR and AMIC didn't bother to make this clear to Congress) its slash-and-burn philosophy did have significant effects. A recent GAO report demonstrated that imaging expenses declined 12.7% in 2007 following implementation of DRA 2005. Yes, this hurt radiologist-owned facilities, but I'll bet it hurt the self-referrers more.

As a Conservative, I chafe at the need for govermnental intervention in these issues. But I think we Conservatives are mischaracterized. It is impossible to achieve "zero-regulation," mainly because of human nature. That would yield sheer anarchy. There will always be those who look for loopholes and other ways to thwart the sytem. I don't think anyone really wanted lenders to give out loans to those who would never be able to pay for them, and we know that Pete Stark never intended for self-referrers to have PET/CT's in their offices.

It could be argued that regulations such as the Stark Laws and government programs for housing loans have created these situations, but without the regulations there would be a complete free-for-all. Sadly, only the government can provide the fix.

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