Monday, April 26, 2010

Answer to Question #2-What Physician Practices Drive Up Health Care Costs?

Various experts using different methods have determined that we Americans presently spend about $700 billion on inappropriate non-beneficial care and that this excess spending is primarily due to physician practices. What do you believe are the factors causing physicians to practice this way and how would you address these issues?
A. There are multiple studies and estimates by experts leading to the conclusion that about $700 billion dollars per year are spent on unnecessary, inappropriate care in the United States.

1) The Dartmouth Atlas of Health Care

Peter Orzag (former head of the Congressional Budget Office, presently Director of The Office of Management and Budget) using this data is quoted by Trapp D., “…estimated that up to $700 billion of the nation’s $2.3 trillion in annual health care spending does not improve outcomes”.(1)

Kenneth I. Shine , former President of the Institute of Medicine of The National Academies of Science in an editorial responded to an earlier version of this map saying, “….as much as 30% of health care costs might be eliminated without adversely affecting health care outcomes.” (2)

Arthur Garson and Carolyn L. Engelhard said in their book, “We do waste a lot of dollars on medical care, but this “one-half” estimate is based on an over-zealous interpretation of the data: the number is more likely one-third.”(3) This one-third estimate exceeds $700 billion per year.

2) McKinsey & Co. December 2008 demonstrated by a different method that compared to other countries the U.S. wastes about $700 billion yearly on health care.

B. Dr. Arnold S. Relman former editor of the New England Journal of Medicine wrote, “Doctors, in consultation with their patients — not insurance companies, legislators, or government officials — make most of the decisions to use medical resources, thereby determining what the United States spends on medical care.”(4)

C. There are several factors causing physicians to practice in this way.
1) Doctors feel compelled to practice defensive medicine – the Massachusetts Medical Society has studied the cost of the yearly amount (2008) spent on defensive medicine in an attempt to minimize lawsuits. The study revealed that in Massachusetts a conservative estimate was $1.4 billion.(5)
2) Unrealistic demands by physicians placed on patients/families, in the name of patient autonomy, to make sophisticated and frequently non-beneficial and expensive medical decisions. These practices are well described by Dr. Atul Gawande in his book Complications.(6)
3) The present structure of advanced directives causes confusion and unrealistic expectations.(7)
4) Congress’s control of Medicare reimbursement rates under the influence of intense lobbying has resulted in the underfunding of primary care and overspending on technology and drugs.
5) Drug and device companies are now allowed to advertise to the public.

D. To address these problems I suggest the following actions:
1) Congress should amend The Patient Self Determination Act and related acts to contain the phrase, “within the bounds of good medical practice”.
2) Congress stipulates the use of a hospital admission form (below) for all Medicare patients. This form would enable patients to clarify their medical preferences with guidance as to medical feasibility along with an appeal mechanism in case of conflict.
3) The scope of peer review expanded to include consistent, uniform, organized oversight by senior physicians and nurses with knowledge and experience in the practice of medicine and patient/family support to ensure that only beneficial care was being delivered.
4) Internal medicine sub-specialists should provide primary care for their patients who do not have a primary care physician.

1. Trapp D. Obama budget sets stage for reform of Health care system, Medicare pay, American Medical News. March 16, 2009 page 4
2. Shine KI. Annals of Internal Medicine. 2003; 138:347-8. PMID: 12585834
3. Garson A, Engelhard CL. Health Care Half Truths: Too many myths, not enough reality. N.Y., N.Y. Rowman & Littlefield Publishers, 2007, Page 17
4. Relman AS. Doctors as the key to health care reform. New England Journal of Medicine 2009:361: 1225-1227 PMID 19776404
5. (accessed April 20, 2010)
6. Gawande A. Complications: A surgeon’s notes on an imperfect science. N.Y., N.Y. Henry Holt & Company, 2002,Page 208
7. Fisher KA, Rockwell LE, Scott M. In Defiance of Death: Exposing the Real Costs of End-of-Life Care. Westport, Connecticut , Praeger 2008, Page 11


Anonymous said...


Anonymous said...

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Anonymous said...

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Anonymous said...


Peter Jones said...

Hello, As your Nation deliberates on health care reform can you please consider Hodges' model as a resource?

The model provides a conceptual framework that is universal in application and can act as an aide memoire, plus on paper and other media.

Developed in health and social care education the model can be used beyond health care.

There is a website that includes Brian Hodges' original course notes which are provided freely:

The site features four unique care (knowledge) domains, e.g. SCIENCES -


Plus a blog with a bibliography:

Many thanks for your time, if you have any questions I would be pleased to assist if I can.


Peter Jones
RMN, RGN, CPN(Cert.), PGCE, BA(Hons) Comp/Phil, PG(Dip)COPE.
Hodges Health Career - Care Domains - Model
h2cm: help 2C more - help 2 listen - help 2 care

Anonymous said...

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Doctor Kenneth Fisher said...

Peter Jones,
Thank you for your thoughtful suggestion, I will follow-up. Kenneth A. Fisher, M.D.

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