A while back, Bob blogged on the phenomenon of physicians "expanding" their practices with non-traditional "extras" in an effort to bolster revenue. For example, one physician added botox injections and hair removal to the list of services she offers, which apparently help to offset decreases in other areas of her practice.
According to the NYT's Reed Abelson, this idea is catching on in other medical specialties, as well:
"Spinal-fusion surgery is one of the most lucrative areas of medicine...But there have been serious questions about how much the surgery actually helps patients with back pain and whether surgeons’ generous fees might motivate them to overuse the procedure."
And that's not all; apparently, these same surgeons invest in the companies which make the "hardware" (screws and plates, for example) which are used in the surgery.
I'm not sure I have a real problem with the latter: is it unethical for me to invest in insurance companies? Or my mechanic to buy some shares in Pennzoil? I didn't think so.
But the "non-story" has legs: "Federal regulators have voiced concerns about the growing popularity of the investment arrangements, which would potentially violate antikickback laws if doctors receive stock or are otherwise compensated to use or recommend certain devices."
This sounds to me a bit more damaging than simply buying stock in a company with which one does business. I suppose it would be akin to me only selling policies from companies whose stock I own, or that mechanic only using Pennzoil when servicing my car. I just don't believe that any one carrier (and/or its products) is always right for every client. In the same way, it's difficult for me to believe that XYZ Corporation's spinal products are always the best choice for every patient.
According to Ms Abelson, many of the almost 100 companies in the spinal devices field are owned (to some degree) by physicians. On the one hand, I'm still not convinced that this is as a priori conflict of interest. On the other hand, though, it does look like there may be a problem.
So what does this have to do with insurance? Well, it seems to me that if this is increasing the cost of health care, then it is increasing the cost of insurance, as well. After all, at least some of the funds being so directed come from insurance (and/or Medicare) reimbursements. If the prices are inflated, or if there's no effort made to hold down costs, then this doesn't bode well.