Why would hospitals like HCA perform unnecessary surgery? Because it pays.

August 7, 2012

((Christopher Furlong - Getty Images)

If you want to understand the problem of how we currently finance our health-care system, there's a great case study to be had in HCA, the largest for-profit chain of hospitals in the country. A New York Times investigation out Tuesday morning found HCA cardiologists in Florida to be performing unnecessary procedures on patients who, in some cases, did not even have heart disease in the first place.

Why perform a an invasive procedure, which comes with risks to the patient, if it's unnecessary? Reed Abelson and Julie Creswell combed through thousands of pages of confidential memos and e-mails, where they saw "hospital officials [asking] information on how the physicians’ activities affected the hospitals’ bottom line."

In other words, the doctors may have performed unnecessary procedures because there was a financial incentive to do so (HCA, in the Times story, disputes this, saying that decisions about care were motivated by a "strong focus we have on quality patient care.”).

If you are a hospital that wants to boost its bottom line though, performing more cardiac procedures -- even those that aren't necessary -- is pretty much the way to go. Right now, doctors get paid for each service they provide. The cardiologist that inserts more stents and performs more surgeries tends to net a higher salary.

There's a lot of griping about this "fee-for-service" payment model exactly for this reason: It nudges doctors to deliver the most health care, even when less could be better for the patient -- not to mention better for bringing down health-care costs.

Separate research suggests this phenomena of unnecessary cardiac surgeries isn't necessarily isolated to HCA hospitals. Health policy researchers at the University of Michigan recently looked at cardiology procedures done across the state. They found that nearly half -- 43 percent -- should not have happened if surgeons had followed medical guidelines. The risks outweighed the possible benefits.

This happens so much that there's actually a term for it in the medical literature.  “Oculostenotic reflex” was defined over a decade ago as the “irresistible temptation” on the part of interventional cardiologists to expand narrowed coronary arteries, despite evidence-based guidelines” suggesting the use of a different intervention, such as medication (which comes with fewer risks and at a lower cost).

The health-reform law does take some steps to address these unnecessary procedures, by creating new payment models where providers would essentially lose money by performing procedures they don't need to. That's the whole idea behind the health law's Accountable Care Organizations, where doctors band together and take a lump-sum for covering a set number of patients. If they can deliver care for less -- while hitting certain quality metrics -- they pocket what's leftover. Doctors that perform unnecessary care, and go over that set amount, will find themselves in the red.

Right now, however, that's not how most of our health-care system works. As of 2008, a Bureau of Labor Statistics report found that 78 percent of health plans pay their doctors on a fee-for-service model. Most of Medicare works this way, too -- creating an incentive for doctors to keep inserting more stents into patients -- even if the medical literature suggests otherwise.

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Michelle Williams · August 7, 2012