A Case in Point: The Tangled Web of Misaligned Incentives and Health Care Costs in the U.S.

December 13, 2010

In 2007, the COURAGE trial (aka: Clinical Outcomes Utilizing Revascularization and Aggressive Drug Evaluation –a mouthful!) results were reported in the New England Journal of Medicine. This study concluded that for those with stable coronary artery disease, the insertion of stents was no better than medication and lifestyle changes at preventing future heart attacks or strokes, nor did it extend life. There were different side effects from each approach but clinically, this trial supports the concept that the choice of treatment ought to be based on patient preferences unless there were unique clinical factors present. The COURAGE trial results were widely publicized and use rates of these procedures have declined overall since then.

Given all the evidence around treatment of patients with stable coronary artery disease, it was shocking to read a particular story about cardiac treatment as reported in the Dec 6, 2010 New York Times. The New York Times article is stunning in its depiction of some core issues about why US health care spending is high and how incentives in the current system can compromise patient care.

The article is about Dr. Midei, a Baltimore, Maryland cardiologist, a highly productive cardiologist. As an example of his productivity: the New York Times reported that on one particular day, Dr Midei inserted  cardiac stents in 30 different patients!  And, he was richly rewarded for this level of surgical intervention. In addition, of course, to obtaining a very high income (millions) as a result of all of these procedures, he was also courted and rewarded with perks and bonuses by Abbott Laboratories, the maker of the stents. The Centers for Medicaid and Medicare Services (CMS) has been investigating Dr Midei and has concluded that over a two year period he may have inserted almost 600 stents in Medicare patients that were medically unnecessary.  Dr Midei’s hospital, St Joseph, was accused of providing kickbacks in exchange for patients (each procedure can bring $10,000 in revenue to the hospital) and paid a fine to CMS of $22 million and let hundreds of patients know that they may have had stents inserted that they did not need. Many of these patients are now suing Dr. Midei. And even after all of these issues came to light, Abbot Laboratories put Dr. Midei on staff as a consultant in return for all the “help” he had provided to them over the years.

What an amazing illustration of many of the issues in the health care system today! Dr. Midei was not a fly by night doctor. He was trained at Johns Hopkins and considered a “star” in the Baltimore market.

This is clearly an illustration of the perversity of the incentives in the system at many levels. In fee for service systems, providers earn more by doing more. And, in our current physician reimbursement structure, procedural interventions are valued much more highly than are interventions that take time, thought and dialog with patients. Hospitals earn more by keeping their beds filled and device manufacturers/pharmaceutical makers’ profits are all dependent on increased sales whether the care is medically needed or not. How far we are from the concept of compensation based on how effective those providing health care services and supplies are at improving outcomes for patients!

Until we change the fundamental incentives in the system, we will never change the picture of health care spending in this country. Indeed, that’s what the parts of health care reform that deal with ACOs, PCMH, value based purchasing and the like are all about.

What is most concerning about this particular case is that – though Dr Midei was certainly extreme – the unnecessary provision of procedures for profit is more common in health care than most patients know. Let’s hope that the lawsuits are instructive to all practitioners who are tempted by the money in the system: over treatment/inappropriate treatment should not pay.