Rethinking Healthcare

Conflicts of interest may be at heart of health care reform

Conflicts of interest may be at heart of health care reform

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Most of the debate over getting U.S. health care costs in line with those of the rest of the world involves finger pointing. Is it the profits made by insurers? Is it the lack of automation? Is it the risk of lawsuits? Or is it doctors turning from healers into businessmen?

Most of the debate over getting U.S. health care costs in line with those of the rest of the world involves finger pointing.

Is it the profits made by insurers? Is it the lack of automation? Is it the risk of lawsuits?

Or is it doctors turning from healers into businessmen?

What the BBC and policy makers now call the McAllen Problem is a simple conflict of interest. (This image, from McAllen.net, shows officials of McAllen's doctor-owned Renaissance Hospital making a donation to the local Christmas for Kids charity.)

Drawing heavily from a New Yorker article published last month, the charge is that when doctors become owners of clinics, imaging centers and hospitals they gain an incentive to over-use those facilities. Their business interests conflict with their medical interests and they subtly tilt toward the former.

While several major research centers, like Harvard, have tightened up their conflict-of-interest rules recently, mainly for fear of scandals like one enveloping Emory University and drug research, the doctor-entrepreneur conflict has not been addressed.

Yet it's old news.

As far back as 1991 studies were being done linking doctors' ownership of clinics and imaging centers to skyrocketing costs. Yet at that time the AMA backed away from any rulemaking, fearing a backlash among doctors in the business.

Instead the AMA has focused recently on possible conflicts arising from corporate-owned clinics staffed by nurse-practitioners, fearing unfair competition. Given the enormous and growing shortage of primary care, one must wonder now whether that stand was itself a conflict of interest.

This is not a partisan issue, by the way. In 2006 the Bush Administration sought, through the budget process, to limit doctors' ownership of hospitals.

In his June 9 speech to the AMA, President Obama does not appear to have directly addressed the issue of doctors having a conflict of interest in owning clinics, hospitals or imaging centers. He addressed McAllen only obliquely, noting that people there are over-treated based on a Dartmouth cost study.

But he did say this:

You did not enter this profession to be bean-counters and paper-pushers. You entered this profession to be healers - and that's what our health care system should let you be.

That starts with reforming the way we compensate our doctors and hospitals. We need to bundle payments so you aren't paid for every single treatment you offer a patient with a chronic condition like diabetes, but instead are paid for how you treat the overall disease. We need to create incentives for physicians to team up - because we know that when that happens, it results in a healthier patient. We need to give doctors bonuses for good health outcomes - so that we are not promoting just more treatment, but better care.

Few considered that when he spoke those simple words some doctors might be cringing, or preparing to fight back. But he knows now.

Political deals with hospitals, insurers employers and drug companies are one thing. Breaking the link between doctors' ownership of facilities and their over-use will be harder to do, because it puts the Administration in direct conflict with an important interest group.

But word about these conflicts of interest is out. It will be interesting to see how both the profession and politicians address them.

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Dana Blankenhorn

Contributing Editor

Contributing Editor Dana Blankenhorn has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement and founded the Interactive Age Daily for CMP Media. He holds degrees from Rice and Northwestern universities. He is based in Atlanta. Follow him on Twitter. Disclosure