Supplier Induced Demand - New Technology and Overutilization in Supplier Induced Demand

New Technology and Overutilization in Supplier Induced Demand

Physicians are by nature and duty patient advocates, guiding the patient through joint decision making. This in part stems from a large knowledge differential between the two, a term known as asymmetric information, and evidenced by the differential between patients and physicians' interpretation of medical terms, underscoring the need for physicians to cross examine patients to verify whether they understand the terminology used in the clinical encounter. While the physician bears the brunt of the knowledge differential, the patient is also responsible for sharing their entire medical history, concerns, barriers to and preferences for treatment in order for the physician to be an effective advocate for their health . In effect, the patient provides all relevant information to the physician and relies on the physician to make the clinical decisions for them. This relationship requires a great deal of trust on the part of the patient, assuming that the clinical decisions made solely focus on patient health.

However, a physician's behavior may also be influenced by their desired income level. The current system is oriented towards fee for service, punishing lower utilization and rewarding overutilization through increased revenue. Physicians may use their knowledge differential and influence over patients to increase utilization of imaging or screening services, given the potential financial rewards.

The behaviors seen in supplier induced demand in healthcare have contributed to our current overuse of imaging and diagnostic tests, which has resulted in an upward spiraling of medical costs projected to equal 20% of our GDP by 2015. The advent of newer technology has not only led to improvements in care, but also to potentially unnecessary screening and diagnostic testing possibly influenced by financial incentives to referring physicians, practice behavior of referring physicians, US health system, comparative effectiveness research, appropriateness criteria, and quality gaps in evidence-based care. It has been suggested that fragmented care processes, imperfect patient memory, and lack of electronic medical records also contribute to the overutilization of imaging services. As a result, imaging services and physicians' reliance on these technologies have increased at a dramatically higher rate than other technologies. Advancements in imaging have broadened their application, increasing uptake. For instance, positron-emission technology (PET) is now used in oncology and degenerative diseases of the central nervous system. Similarly, overutilization is evidenced in the promotion of CT scans for private offices.

As physician owned surgical centers and specialty hospitals increasingly use imaging services, insurers question the cost benefit ratio of the technology. Data also suggests that physicians tend to refer well insured patients to physician owned facilities, while referring Medicaid patients to hospital outpatient clinics, thus financial incentives to self-refer to physician owned facilities may affect the referral patterns of less financially beneficial patients. As pointed out in one case, it is difficult to identify this type of overutilization "fraud". In the high profile case of Dr. Mark Midei, he inserted cardiac stents in over 500 patients whose artery occlusion rates did not warrant surgical intervention according to standards of care. The hospital Dr. Midei practiced at agreed to pay $22 million fine to settle charges.

Another cardiologist in Louisiana was sentenced to 10 years in prison, convicted on 51 counts of billing private and government health insurers for unnecessarily implanting cardiac stents, and the hospital he practiced at was forced to pay a $3.8 million settlement to the Department of Justice and $7.4 million class action lawsuit.

Another contributing factor to overutilization is a lack of real time cost available to both the physician and the patient. Physicians are unable to ascertain the true cost of a screening, imaging, or lab test thereby making it difficult for them to determine how much they are charging the system. Effects of overutilization on patients can include unnecessary radiation exposure and false positive results. Initiatives are underway to curtail excessive screenings that have been deemed unnecessary, such as limiting prostate cancer screening as the United States Preventive Services Task Force recently found inadequate evidence to determine whether treatment for prostate cancer detected by screening actually improves health outcomes. Studies in geographic variation have shown no difference in patient outcomes between physicians who practice in high cost areas and those who practice in low cost areas.

A 2009 American Board of Radiology Foundation summit to address overutilization also identified defensive medicine and patients as contributory factors to the issue. Defensive medicine is an order for imaging as a result of potential malpractice, rather than benefit to the patient. It has been estimated to account for 5-25% of all imaging costs. Patient demand often stems from little financial responsibility for costs associated with imaging, as well as information from other individuals, radio, the media, and the Internet with disproportionate understanding of the implications of imaging (further testing, exposure to radiation). Patients are being targeted to "self-present" to imaging facilities for uncovered imaging services that claim to offer screen for undetected coronary artery disease and cancer in the lungs and other organs. However, the false positives observed for CT screening of coronary artery disease are similar to the levels of other noninvasive tests for ischemic heart disease and some data indicate these services do not yield more precise results. For instance, data from electron-beam CT did not outperform the Framingham Risk Index for predicting coronary events.8 Researchers suggest that the use of CT scanning for cancer screening cannot offer patients complete "peace of mind" as there are still issues of sensitivity and specificity, raising concerns over the implications of false negatives.

Concerns over overutilization of diagnostic tests have prompted the definition of "high value care" as the health benefits of an intervention justifies its harms and costs. Some examples of low value care include a repeat ultrasonography for abdominal aortic aneurysm following a negative study or screening low risk individuals for hepatitis B virus infection. Routine low back pain imaging is another area of overutilized imaging. To curb future costs, it has also been proposed to include stewardship of resources (avoiding the overuse and misuse of diagnostic tests) as a general competency of the Accreditation Council for Graduate Medical Education/American Board of Medical Specialties for residency training and evaluation.12 Value based insurance design and personalized medicine are other methods being touted as solutions to bending the cost curve and reducing overutilization.

Physicians owning their own diagnostic and treatment facilities In one report that identified the influence of the location of care delivery on SID, it was found that physicians were more likely to treat the low-severity patients at their physician-owned facility rather than to increase the overall number of procedures that were done in the population in order to increase revenue.

Geography Variation may also exist from regional or local community practice, and utilization of healthcare services can vary widely. McAllen, Texas, is one of the most expensive healthcare markets in the U.S., where in 2006 Medicare spent $15,000 per enrollee here, which was almost twice the national average.

Direct-to-consumer advertising Three out of four patients who ask a physician about a particular medication have that medication prescribed to them because they saw advertising for it. This results in a change in prescribing habits such that a physician will prescribe the more expensive requested medication rather than a lower price generic alternative. Advertising for cosmetic surgery services can influence patients and physicians, extending even into the area of cosmetic gynecology where outcomes are unproven.