Remember: Referral for Profit Continues to Drive Up Healthcare Costs

February 6, 2013

The old saying is that the society has short-term memory syndrome.  In other words, society is quick to forget.

Because referral for profit is patient abuse by CMS definitions, it’s worth reminding anyone that stumbles by this blog that there’s a large body of evidence that concludes that referral for profit is draining the finances out of our healthcare system…and does not result in the quality of care that paying patients deserve.

In this blog report we finding the heading “License to overuse” very appropriate.

Dr. Mitchell’s comment sums up the problem with respect to imaging (MRI, CT, x-ray):

“This is a huge problem,” says Jean Mitchell, PhD, a Georgetown Public Policy Institute economist who has studied self-referral. The Medicare Payment Advisory Commission (MedPAC) has estimated that 1 in 3 imaging studies may be unnecessary. That would equal about $55 billion of the $170 billion spent on imaging annually, according to Jeff Goldsmith, PhD, president of Health Futures, coauthor of a book about medical imaging, and a member of MANAGED CARE’S Editorial Advisory Board.   click here for more

Another blog post summarizing Mitchell’s study on the over-utilization of surgery:

She [Mitchell] specifically looked at three types of surgeries:  carpal tunnel repair, rotator cuff repair and knee arthroscopy.

Anyone care to take a wild guess as to which group performed more surgery?

Age- and sex-adjusted odds ratios indicate that the likelihood of having carpal tunnel repair was 54% to 129% higher for patients of surgeon owners compared with surgeon nonowners. For rotator cuff repair, the adjusted odds ratios of having surgery were 33% to 100% higher for patients treated by physician owners. The age- and sex-adjusted probability of arthroscopic surgery was 27% to 78% higher for patients of surgeon owners compared with surgeon nonowners.  click here for more

While outsiders almost always place blame on the insurance companies for failing to address or ignoring this behavior, we find this quote, especially in light of our battle with the CA Medical Association & CA Orthopedic Association, to be a more accurate summation of why referral for profit continues to exist:

“Private payers could just stop paying for it, but they are more afraid of pushback from providers,” she says. “The providers really bully the insurers.”

We applaud Dr. Mitchell for her persistence and continuous efforts to expose some physicians for their unethical and unchecked referral for profit behavior.

If only consumers were aware of the abuse…

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