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We are joined by Edward Hoffer, an internal medicine physician, to explore the alarming levels of waste plaguing the U.S. health care system. Together, we shine a light on the various culprits behind this inefficiency, ranging from unnecessary treatments to bloated administrative costs. Edward sheds light on the root causes of this pervasive issue and proposes potential strategies to tackle it head-on. By offering a unique perspective on the factors driving health care expenditure in America, he prompts us to rethink our approach to delivering and funding health care services.

Edward Hoffer is an internal medicine physician and author of Prescription for Bankruptcy: A doctor’s perspective on America’s failing health care system and how we can fix it.

He discusses the KevinMD article, “One person’s wasteful medical spending is another person’s income.”

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Transcript

Kevin Pho: Hi, and welcome to the show. Subscribe at KevinMD.com/podcast, and get CME for this episode by clicking on the CME link in the show notes. Today we welcome Edward Hoffer. He’s an internal medicine physician and cardiologist. Today’s KevinMD article is “One person’s wasteful medical spending is another person’s income.” Edward, welcome to the show.

Edward Hoffer: Thank you very much, Kevin, I’m glad to be here.

Kevin Pho: So let’s start by briefly sharing your story and journey.

Edward Hoffer: Well, I’m an old timer. I graduated medical school in 1969, I’m still working, and I have seen two trends during my lengthy career.

One is that the science and technology of medicine has just blossomed. When I was an intern, if you had Hodgkin’s disease we did an exploratory laparotomy, splenectomy, and sampled lymph nodes. And the big breakthrough in cardiac care when I was an intern is that we cut your day in bed from six weeks to four weeks. So we’re now in an era where PET CTs have replaced the laparotomy and angioplasties have replaced the long stay in bed.

But at the same time, the way in which care is delivered, I think, has gone down the tubes. Medicine was a calling. Now medicine is a business, a business run more and more by, in quotes, the suits. And doctors are now paid workers who work for those higher up.

And so I’ve written a book about it, I speak about it, and I may be tilting at windmills, but I would really love to see doctors take back the control of the profession, and more attention be given to the fact that medicine should be a caring two-way interaction and not simply a business transaction.

Kevin Pho: So when you say that medicine is being taken over by business entities, I often hear that a lot from a whole spectrum of clinicians. How has that influence specifically affected you and the care that you give to patients?

Edward Hoffer: Well, more and more it’s the judgment of physicians being second guessed by people whose main interest is elsewhere. There’s been a lot written about the prior authorization process, where somebody who is a specialist who feels a procedure is necessary is second guessed by a generalist who’s never performed the procedure or cared for patients with that problem. And we saw the scandal with, I believe it was Aetna, that had physicians basically rubber stamping the decisions of nurse reviewers. That’s totally inappropriate.

On a micro scale, one experience I had cemented the fact that you don’t get economies of scale with larger and larger organizations. What you get is more layers of bureaucracy.

Back some years ago, when the fad, at least in Massachusetts, was to have integrated systems, four of us who were solo practitioners were all bought up by Lahey Clinic, because they wanted to expand their network. And during one of our meetings I asked what seemed like a logical question. I said, you’re going to pay us money up front, you’re going to guarantee us that if we continue to work at the same pace we’ll take home the same salary, and you’re going to add on all sorts of extra expenses. How is that going to benefit you? And the answer I got was basically, tut tut, dear, we’re businessmen, we understand these things, don’t worry your little head about it.

And so we got into a contract. First thing they did was decide our phone systems weren’t up to their standards. And so I looked in our closet and saw the man putting in an astronomical setup, and I said, well, that looks like quite a system. And he said, oh yeah, we can handle 500 trunk lines. And since there were two of us in one building, I thought they either were planning on going up 10 stories or simply doing it the Lahey way.

We also had a full-time administrator who now had to be supported out of our income. And about a year or two into this arrangement they came and said, we’re losing our shirts on you. Which was hardly a surprise.

And again, I’m showing my age, but when I was at a hospital in Worcester, we had an administrator, we had a chief of nurses, and we had a chief financial officer, and they did a fine job running the hospital. I now look at comparable size hospitals and you have an entire C-suite. You have the CEO, the COO, the CFO, and all of these people making excellent salaries, none of them providing any care, and all of them have to be supported by the earnings of the physicians.

Decisions about things like electronic medical records are made in the interests of what will capture the most charges, never mind what will actually improve care. MGH, where I’ve been affiliated for a long time, had a wonderful homegrown EMR that everybody liked, was easy to use, and they then spent literally hundreds of millions of dollars to convert to Epic, which everybody hates. It does apparently capture more charges than the old system, and keep things in house.

So that’s the kind of thing that, it may be too late for us to reverse that process. I hope not.

Kevin Pho: One of the business aspects of health care today of course is the cost of care, and you touch upon that in your KevinMD article, “One person’s wasteful medical spending is another person’s income.” Now, for those who didn’t get a chance to read that article, just tell us what this one’s about.

Edward Hoffer: OK. We like to think that we practice evidence-based medicine, but in fact much of what we do is not supported by good evidence, or may even be contraindicated.

A great example is that for many years orthopedic surgeons would do arthroscopy and shaving to treat people with osteoarthritic knees. A study came out in 2002, it was an excellent study with sham control, and they showed that this procedure was absolutely worthless. And then some researchers went back three years later and discovered that almost the same number of procedures were being done, even after it had been proven to be useless.

People do PSA tests in 80 year old men, they do Pap smears in 75 year old women, both of which have zero evidence of clinical benefit. But somebody is making money.

In my own field of cardiology, if somebody has stable angina, we know that in most instances good medical treatment gives you exactly the same results as angioplasty. But you sit a patient down in front of a view screen and you say, well, you’ve got this blockage of your artery and I can fix that. What patient is going to say, oh no, don’t fix it? And the cardiologist gets a few thousand bucks for doing an angioplasty, and the patient with any luck isn’t any worse off, but is certainly not much better.

People who say everything is fine like to say, well, it’s a consumer choice like any other. But it isn’t. When you’re going to buy a new car or a new stereo, you can go to Consumer Reports, you talk to your friends, you make a decision. When you’re sitting down with a physician, in most cases it’s a very asymmetric relationship. You assume the doctor knows what they’re doing, what’s best for you, and are unlikely to question it.

And I think an awful lot of marginally necessary procedures are done. Yes, you can sort of find some justification for them, but they’re really not supported by evidence, they’re really not going to help the patient that much, but the physician is well paid for doing them.

Kevin Pho: So to summarize, you’re saying that sometimes evidence-based medicine, and the call to do fewer tests and fewer treatments, is certainly in tension with the business aspects and revenue generating aspects that dominate health care today.

Edward Hoffer: It is. And one of the worst things I think that’s happened is the growing impact of private equity on medicine. Private equity firms buy up specialty groups, and they particularly tend to focus on groups where there are a lot of lucrative procedures, and they then push the doctors to do more and more, generate more and more income.

I don’t think private equity has any role in medicine, and it needs to be very tightly regulated. But again, I think the ball has been dropped on that. I think people complain after the fact but don’t do enough ahead of time to look at these.

Kevin Pho: Now, would you say that this pressure is explicit? Have you heard private equity, for instance, or hospital systems, explicitly tell the physicians to order more tests or refer to more specialists?

Edward Hoffer: I’ve certainly heard them say that we want you to refer internally. You may say that you know somebody who’s really good at this procedure, and you think their personality would match your patient, and they say, that’s out of our system, you find somebody in our system.

And I do have friends who’ve had practices taken over by private equity who indeed have told me that there is a, sometimes subtle and sometimes not so subtle, sort of, we gave you this money up front, doctor, we need to earn it back, and you’ve got to start doing more cataract extractions, angiograms. So yes, that definitely occurs.

Kevin Pho: So it sounds like the core root issue here is how physicians and hospital systems are reimbursed. Primarily they’re reimbursed in a fee for service based system. Would you say that is the major reason that needs to be fixed?

Edward Hoffer: That is a large chunk of it. We are paid piece work, we’re paid for doing things, and outcome be darned. If you do a surgery that is absolutely necessary, you’re paid, and that’s fine. If you do a surgery that’s marginally indicated, you get paid as well, and that may not be so fine. Obviously outcomes are what we should be looking at, outcomes and not the process.

Most of the incentives that people are given to earn some extra money tend to look at process, not outcome. It’s whether you checked off the box that the patient is a smoker or not in your EMR. If you’ve got to do that 95 percent of the time or you get dinged, it’s irrelevant whether you’ve known the patient for 30 years, they’ve never smoked, and you feel silly asking them, but you’ve got to do it and you’ve got to check the box.

If you measure hemoglobin A1c twice a year you’re good, if you do it once you’re bad, and never mind how well the diabetes is controlled or whether the person ends up with an amputation or not. It’s the things that are measured, things that are easy to quantify, rather than things that really matter to patients.

Kevin Pho: Now, what are some of your solutions? I know that there are some efforts to remedy the fee for service system toward a more value based system. But if you were the health care czar and in charge of everything, tell us the approach that you would take to fix this issue.

Edward Hoffer: Give me absolute authority over the U.S. health care system.

Number one, I would double the supply of primary care physicians and cut drastically the number of specialists. You get better care, better organized, better results, when everybody has a trusted primary physician.

Secondly, I would equalize, or maybe it doesn’t need to be equalized, but I would put money into primary care, so that everybody had a medical home where they could get most of their care and be referred out when necessary.

I would dramatically cut the administrative waste. 25 percent of our enormous health care bill is administrative overhead. It’s paying the UnitedHealthcares and Aetnas of the world, it’s the cost to the doctors to meet all the requirements. We could cut probably 15 to 20 percent of our annual health care bill painlessly if we could simplify the administration of it.

And last, I would work on getting people to focus on outcomes. That you are paid to take care of somebody, paid to see that they are feeling better after they’ve seen you, and not simply the fact that you’ve done something to them.

Kevin Pho: So short of these macro changes that people have been discussing for what seems like decades now, is there anything individual clinicians can do, anything I can do specifically as a primary care physician in the exam room, to help rein in health costs?

Edward Hoffer: Oh, there are some obvious simple things.

One is, start really looking hard at using primarily generic medications rather than branded medications. It’s amazing, I’ve had patients who insisted only the brand would do, until the price became an issue, and all of a sudden they were doing just fine on generics.

I would give them the time, explore what problem they were dealing with, what their values were, what they really wanted out of a medical interaction, and not just send them off to get endoscoped because they had a little heartburn.

And I think that all comes down to giving the primary care physician more time. When you’ve got 10 or 15 minutes to see somebody, you tend to focus on the things you have to do and not on the things you like to do. And I think if we just are able to slow down a little bit and talk to the patient, they would feel better and the system would spend less money.

Kevin Pho: We’re talking to Edward Hoffer. He’s an internal medicine physician and cardiologist. Today’s KevinMD article is “One person’s wasteful medical spending is another person’s income.” Edward, we’ll end with some of your take-home messages to the KevinMD audience.

Edward Hoffer: Take home: take the extra five minutes to listen to your patient before making a referral. Decide whether that referral is necessary.

Look particularly, in hospitals, at whether people are being over tested, and whether you can cut that down. Particularly on the inpatient side, we see tests that are ordered on admission as daily labs, and when the patient’s stable they keep being done daily. Somebody’s got to stop that.

And focus on outcomes, and not on procedures and processes.

Kevin Pho: Edward, thank you so much for sharing your perspective and insight, and thanks again for coming on the show.