Flat Lines and Bottom Lines

Think money drives medicine? You don’t know the half of it.
By Ezra Klein

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Filled with arresting statistics and stunning anecdotes, Maggie Mahar’s Money-Driven Medicine is the sort of book you can’t help but tattoo with a thousand underlines, exclamation points, and scrawled comments. So it’s surprising that the most poignant lines come just seven pages into the preface. “In the course of these interviews,” Mahar writes, “I was surprised by just how many physicians returned my calls. The great majority did not know me; I expected responses from perhaps 20 percent. Instead, four out of five called back. Most talked for 30 minutes—or longer.” Generally, a writer researching her exposé of an industry needs to seek out, convince, and cajole her informants. Not here. The state of health-care is so alarming that the participants are desperate to blow their whistles, if only someone would listen.

Money-Driven MedicineMahar did, and closely. Her book offers a guided tour to the medical landscape few patients like to envision—the one where profit, not health, guides the actors. Money-Driven Medicine is really an investigation into the ways the quest for cash infects and distorts every level of the health-care system. It’s a big topic, and Mahar’s dogged insistence on allowing no facet to go unreported makes it larger than even the cynical among us assume. Insurance companies, we already knew, are watching for the bottom line. Big Pharma, too. But your doctor? Did you know that his reimbursement rates encourage him to give you the most, rather than the least, treatment? And did you know that your hospital is likely a private institution, dedicated to improving its bottom line by lowering labor costs, which means dangerously overstretching your anesthesiologists and surgeons? Or that senior administrators in the FDA consider the pharmaceutical industry, rather than the American people, their clients? Money, Mahar believes, is destroying the quality, integrity, and efficiency of the American health-care system, leaving it prey to all manner of incentives and imperatives decent people would be repulsed by if they understood. And if her point isn’t precisely new, the hundreds of unnerving examples, anecdotes, and tales of times when lucre’s influence turned filthy give it a force and coherence it’s never had before.

If the book has a flaw, in fact, it’s that the air is too thick with noise, the crush of complaints and concerns overwhelming in their urgency. The result is nightmarish, both in its intensity and its tendency to flip jerkily from one unsettling scene to the next. We leap from Lew Silverman, a dying diabetic whose doctors can’t conquer their god complex long enough to let him pass without a horrifying array of unwanted and hopeless treatments, to Buddy Rich, a seemingly healthy 60-year-old whose small bowel cancer went first unnoticed, then tragically untreated, as he was repeatedly turned away due to lack of insurance. By the time we’ve reached the FDA’s negligence in yanking malfunctioning defibrillators from the market, the tales of woe and wrongdoing are blurring together—at times in almost contradictory fashion, as when Mahar laments the excess of care, then, with whiplash-speed, segues into a condemnation of withholding treatments. But a bad dream’s occasional disjointedness hardly serves to mitigate its terror. Somebody wake me.

Subscribe Online & Save 33%What the manifold tales, stats, and interviews illuminate is a system almost irreversibly infected by money. The story here is one of market failure, of a peculiar sector where the drive for profit demands not efficiencies and innovations, but volume and market share. That may be fine when we’re talking widgets, but when it means more heart surgeries, less time with patients, more collusion with drug companies, and higher prices for less care—well, even Adam Smith would feel a little ill. But believe me, he’d think twice before summoning the ambulance.

What Mahar excels at is finding the instances where that market failure turned deadly in a routine way. We hear about plenty of corruption and evil, but her innovation is to clearly lay out how the pursuit of profit, conducted in ways that would be neutral and natural in any other industry, turns deadly when transposed to medicine. One of her many examples concerns California’s Redding Medical Center, one of the best cardiac-surgery centers in the state. At the head of the Heart Institute was a pair of hotshot surgeons, Dr. Chae Hyun Moon and Dr. Fidel Realyvasquez Jr., renowned in the field and respected by their colleagues. At least until the FBI raided their offices, charging them with forcing hundreds of unneeded surgeries upon unsuspecting patients.

About half of their operations were found to be unnecessary; a quarter were performed on patients with no serious heart problems whatsoever. Thirty-eight-year-old rancher Steven Hunt made the mistake of setting foot into their unit in late 2001. He was opened up for a bypass operation two days later. Not long after, the incision developed a hernia, and his upper-body strength deteriorated, ending his work as a rancher. The tragedy of it all was that Hunt suffered from nothing more than high blood pressure, easily controllable through medication and diet. When you buy an unnecessary widget, you risk your garage space. When you receive an unnecessary heart surgery, you risk your life and livelihood. But what Moon and Realyvasquez were doing—increasing their volume by aggressively pushing their product—is the most natural method of increasing profits around. The problem, as Mahar explains, is that though it’s easy enough for a customer to pass on the widget, it’s far harder to argue with a trained medical professional warning that any delay on the implementation of his solemnly intoned recommendations could mean death.

Mahar also adds a level of macroanalysis too often absent in this sort of tome. She smoothly lays out how each level of the system has ceased operating in the checks-and-balances style in which it was conceived, and has instead fallen prey to capitalism’s irresistible push towards aggregation and reinforcement. As an example, you’d expect, possibly, that the hospitals and doctors would be kept in check by the insurers in a sort of countervailing powers arrangement, as it’s in the insurer’s interest to limit the treatments offered to its members. But, as Mahar explains, the insurers make their money before the treatments are delivered, by denying insurance to those likely to need it. Unable to really fight at the point of care, insurers have grown adept at passing on the costs, squeezing employers and individuals with double-digit premium hikes at the same time the insurance industry enjoys double-digit profit growth.

Underlying all this is the fact that medicine is particularly vulnerable to perversions of Say’s Law, which states that supply creates its own demand. Diving into the data, Mahar relates Dartmouth researcher Jack Wennberg’s findings that the amount of care a patient receives is scarily dependent on where he lives. The more specialists, hospitals, and doctors you’ve got access to, the more surgeries, medicines, and treatments you’re likely to undergo. Worse, there’s no evidence that the outcomes differ between the two groups, and plenty of evidence that they don’t. Indeed, for those receiving the most intense care, the outcomes are worse—a predictable finding, considering the risk of complications, physician error, and infections.

The question, of course, is why this goes on. Conservatives, enmeshed in their current push for so-called consumer-driven medicine, would have you believe that patients are to blame—they demand the surgeries, excited as all get-out to spend a couple weeks on a luxurious hospital cot. Under this analysis, all the system needs is more patient vulnerability. As Arkansas governor and likely 2008 presidential candidate Mike Huckabee puts it, “One of the reasons we have a health-care crisis is because, as a consumer, I don’t have that much skin in the game. A lot of us feel there needs to be a transformation from a third-party [insurance] system to more [financial] participation by the [patient].”

Mahar neatly dispenses with that excuse, reminding readers that patients don’t actually know what they want. The doctor-patient relationship, indeed, is built on a trust akin to deification—we rely on their extreme training and vast knowledge to navigate an organism that we inhabit but don’t understand, and we take their recommendations as the unswerving expressions of their education and oath. Forgotten in this analysis is that medicine is a business like any other, and profit matters. Even the motto of non-profit hospitals has become “No margin, no mission,” to express the reality that their capital comes from bond investors, and if the investors aren’t happy, there won’t be a hospital left to treat either the poor or the rich.

But that, of course, is the way of things in a system where the richest stakeholders have created a poor healthcare system but an excellent business model that generates massive profits, a certain portion of which are funneled to legislators across the country in order to convince them that the preservation of our free-market system is of the utmost importance.

And it’s precisely that fundamental overvaluing of the free market that Mahar forces us to question. She quotes medical economist Rashi Fein’s warning that “[w]e live in a society, not just an economy.” And our society has to decide if this is the care structure we want. Because the market has done nothing wrong here—it exists to seek profit, and thus provides no easy villains, just a plethora of unfortunate outcomes. It is up to us to decide if the ultimate goal of care should be cash, if our system of insurance should incentivize identifying those most in need of care so they can be denied access to it, if our hospitals should fret over the bottom line or the flat line, if our physicians should practice in a context that leaves them desperate to confide in the unknown reporter who leaves an unexpected message on their voicemail.

 

   

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Ezra Klein is a writing fellow at The American Prospect.  
 
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