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Doctors Reap Benefits By Doing Own Tests

By Shankar Vedantam
Washington Post Staff Writer
Friday, July 31, 2009

In August 2005, doctors at Urological Associates, a medical practice on the Iowa-Illinois border, ordered nine CT scans for patients covered by Wellmark Blue Cross and Blue Shield insurance. In September that year, they ordered eight. But then the numbers rose steeply. The urologists ordered 35 scans in October, 41 in November and 55 in December. Within seven months, they were ordering scans at a rate that had climbed more than 700 percent.

The increase came in the months after the urologists bought their own CT scanner, according to documents obtained by The Washington Post. Instead of referring patients to radiologists, the doctors started conducting their own imaging -- and drawing insurance reimbursements for each of those patients.

In focusing on health-care reform this year, President Obama pledged that a revamped system would hold down exploding costs. But none of the players -- Congress, the administration or the array of interests involved in the process -- has offered a clear path to that goal. And efforts to control medical practices that have driven up expenses, including physician "self-referrals," underscore how difficult it is to alter entrenched patterns.

A host of studies and reports by academics and the federal government shows that physicians who own scanners order many more scans than those who do not. As a result, Americans pay billions of dollars in extra taxes and insurance premiums.

Government panels have found that, across several areas of medicine, ordering more procedures does not improve health outcomes. In the case of medical scans, unnecessary imaging also creates a health risk -- as many as 1 percent of all cancers in the United States appear to be caused by radiation from medical imaging, according to Amy Berrington de Gonzalez, a radiation epidemiologist at the National Cancer Institute.

A lawyer for the Iowa urology practice defended its medical decisions. "The standard of care for a certain category of patients may require a CT scan and the practice may have decided to purchase a CT scan as a result," Victor Moldovan said in an e-mail. "Any assertion that there is some wrongdoing simply because of an increase in scans is unfounded." The urology practice, he added, "understands its obligations very well and complies with all applicable standards."

He noted that in many cases scans must be pre-approved by insurers, "which effectively limits any over-utilization." The Wellmark data compared how often the urologists and equivalent physicians in the region ordered scans. Before their scanner was installed, the urologists ordered fewer CT scans than the other doctors. Afterward, the urologists ordered more than three times as many as the other doctors.

Critics of self-referral say that, just as doctors are not allowed to write prescriptions and then sell medications, they should not profit from imaging. Congress, as part of health-care-reform efforts, is considering a proposal, championed by Reps. Jackie Speier (D-Calif.), Anthony Weiner (D-N.Y.) and Bruce Braley (D-Iowa), to prohibit the practice. Maryland is the only state that bans self-referrals, but the law is rarely enforced.

Physicians, medical associations and imaging-device manufacturers argue that allowing doctors to own and operate scanners increases patient convenience and allows quicker diagnoses.

"It is important for legislators not to take tools out of the hands of doctors," said Jim York, an orthopedic surgeon and president of the Maryland Patient Care and Access Coalition, a group fighting to allow physicians to operate their own scanners.

Detailed analyses by several peer-reviewed researchers, the Government Accountability Office and an independent congressional agency known as the Medicare Payment Advisory Commission, or MedPAC, show that, while self-referrals might improve care and convenience in some cases, that is not the case nationally.

The issue was ostensibly settled in 1992 when the Stark Law was enacted. The legislation prohibited physicians from referring patients to the doctors' own scanning devices. The law offered an exception, however, for physicians whose scanners were in the same office building as their practice. The exception was designed to allow doctors to keep small X-ray machines to quickly figure out, for example, whether a limping patient had a sprain or a fracture.

But since the law was passed, high-tech MRI and CT scanners have become smaller, making it possible for many more physicians to use the "in-office" exception.

A dramatic increase in imaging has followed for the most expensive scans -- MRI, CT and certain cardiac stress tests. According to a GAO report last year, Medicare reimbursed $28 for the most commonly prescribed X-ray in 2006, compared with $1,118 for the most commonly prescribed MRI.

Nationwide, a growing share of physician income came from imaging fees: In 2000, scans in the offices of cardiologists earned the doctors 23 percent of their total Medicare revenue, according to the GAO. In 2006, the figure was 36 percent.

In a report last year, Laurence Baker, a health research professor at Stanford University, found that each new MRI scanner is associated with 733 additional procedures in a region and that each new CT scanner is associated with 2,224 additional scans. That is among only Medicare patients age 65 and older, Baker said, meaning the overall use of the machines probably is much higher.

"Physicians who purchase machines for their offices have a financial incentive to refer patients for additional services, as long as those services are profitable," MedPAC noted in a report last month. "Although physicians are usually motivated by professional ethics and concern for their patients' best interests, physician ownership could influence the clinical judgment of some physicians, particularly when there is not strong evidence to guide their decisions."

On the Web site of medical imaging device manufacturer GE Healthcare, several physicians offer testimonials about how quickly an expensive new scanner could pay for itself: "We're already beating our pro forma [earnings] in terms of the return on investment," one West Virginia physician boasted.

"We were looking for ways to improve our bottom line while also improving patient care," wrote Sanford J. Siegel, a urologist who practices in the Washington area. "The results have been very satisfactory, and I can say absolutely that we are providing better care because we have an in-office CT scanner."

In an interview, Siegel said that he wrote the comment a few years ago, but that since then, insurers have reduced reimbursement rates and imaging is no longer the moneymaker it once was. Siegel, the president of Chesapeake Urology Associates, said he was certain his practice did not order more imaging after purchasing an in-house CT scanner five years ago.

He cited the example of Alvin Crawford, 53, of Reisterstown, Md., who recently came to the office in pain. In an account confirmed by Crawford, Siegel ordered a CT scan using the in-house device. Within minutes, the urologist said, he had identified a kidney stone and scheduled Crawford for a procedure to remove it. If he had sent Crawford to an independent radiology center, Siegel argued, the diagnosis would have taken much longer.

"Just because doctors have CT scanners in their office does not mean they are abusing the system," Siegel said. "Is everyone a Bernie Madoff or a crooked politician? Most doctors are dedicated to providing outstanding patient care. They don't think, 'A CT scan is coming and I am going to make money.' They think, 'A patient needs a blood test or a scan, and I am doing it for him.' "

Jean M. Mitchell, a professor of public policy and a health economist at Georgetown University, estimated that eliminating incentives for needless care could reduce the nation's health-care bill by as much as a quarter. If self-referrals are not barred, she said, physicians ought to be paid through bundled fees, rather than for individual procedures.

"Fee-for-service medicine is like a la carte dining," she said. "Bundling is like a fixed-price dinner. You can get a fixed-price dinner at a restaurant across from my office in Georgetown for $40, which includes salad, soup, entrée and dessert. Your choices are limited, but if you ordered a la carte, the same things would cost $75. If patients want unlimited choice, they should be willing to pay for it themselves."

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