The NYT had a great investigative article on the profit-seeking in a corner of the health care industry. They Lost Their Legs. Doctors and Health Care Giants Profited.
I’m not going to summarize, but I’ll walk you through key excerpts and what they mean. You should read the whole thing.
We’re talking big money. The central goal is sales – as many of the devices as possible.
This self-sustaining ecosystem is worth $2 billion a year, analysts estimate. Insurers pay doctors per procedure. And because new equipment is needed each time, the companies also profit from repeat customers.
The industry targets the roughly 12 million Americans with peripheral artery disease, in which plaque, a sticky slurry of fat, calcium and other materials, accumulates in the arteries of the legs.
With a huge potential “market” the growth machine kicked into gear.
Companies that make equipment for vascular procedures pumped resources into a fledgling field of medicine to build a lucrative market.
A “self-sustaining” ecosystem creates needs lots of self-interested “partners.” Start-ups need start-up capital.
The electronics giant Philips works with a finance company to offer loans for equipment and dangles discounts to clinics that do more procedures. For the 200 doctors who have billed Medicare the most for atherectomies since 2017, at least three-quarters either received loans from the device industry or work at clinics that have.
In 2020, Dr. Brookshire opened his own outpatient clinic in the Rio Grande Valley. He needed at least $600,000. He approached lenders, which demanded high interest rates. He also balked at the terms offered by a venture capital firm.
So Dr. Brookshire turned to Philips, which lent him the funds to get his clinic running. Philips “can offer advantageous financing through this difficult hurdle in the process,” he said in a 2021 promotional brochure, “From Passion to Possible,” on the company’s website.
But the debt needs to be paid back.
Some doctors who own their own clinics push patients to undergo screenings to catch peripheral artery disease in its early, asymptomatic stages. Doctors often encourage patients to get repeat procedures, weeks apart.
Cash payments can’t hurt to create some “loyalty.”
The device industry rewards high-volume doctors with lucrative consulting and teaching opportunities. And it sponsors medical conferences and academic journals to bolster a niche medical field that favors aggressive interventions.
Philips and more than a dozen other device manufacturers have paid him about $2.6 million for speeches, consulting and other services since 2013. For example, Bard, which makes catheters and angioplasty balloons, paid him more than $467,000.
And they embed pricing “incentives” to generate more sales.
At least one company, Philips, allows doctors to reduce or eliminate their monthly payments if they use the company’s equipment to perform a minimum number of procedures.
It all started with a good idea: more care happening in clinics rather than hospitals. But in a privatized system it opens the door for those who want to profit from it.
First, the government changed how it pays doctors for these procedures. In 2008, Medicare created incentives for doctors to perform all sorts of procedures outside of hospitals, part of an effort to curb medical costs. A few years later, it began paying doctors for outpatient atherectomies, transforming the procedure into a surefire moneymaker. Doctors rushed to capitalize on the opportunity by opening their own outpatient clinics, where by 2021 they were billing $10,000 or more per atherectomy.
Medicare’s decision to reimburse doctors for procedures performed outside hospitals led to a proliferation of outpatient clinics specializing in everything from orthopedics to dermatology. A decade ago, there were virtually no clinics to treat peripheral artery disease. Today, there are about 800.
The policy also motivated doctors to perform more procedures, in part because private insurers tend to follow the federal agency’s lead. Before, doctors working in a hospital pocketed only a slice of what insurers paid, with the hospital getting the rest to cover overhead costs. Doctors who owned clinics could now collect the entire payment.
Finally, if health was a public good, rather than a market good it might have led to better care. What a concept!
Yet a wide body of scientific research has found that for about 90 percent of people with peripheral artery disease — including those who experience the most common symptom, pain while walking, or have no symptoms — the recommended treatments are blood-thinning medications and lifestyle changes like getting more exercise or quitting smoking.
It all seems so simple, right?