An Economist Puts Down a Physician's Cri du Couer

We previously posted about the consequences of turning control of health care over to managers and bureaucrats, a movement which may have been inspired in part by Einthoven's call in the late 1980's to break up the physicians' "guild." In that post we discussed an op-ed article in the New York Times by Dr Peter Salgo, a cri du coeur (pardon my bad French) about how increasing business pressures were fraying the doctor-patient relationship.

The article drew some responses. One letter, which wowed one of my favorite fellow health care bloggers, was from Professor Uwe Reinhardt from Princeton University, an internationally known health economist. Reinhardt was not kind to Salgo's article.

• Salgo argued that "as health-care dollars became scarce in the 1980's and 90's," hospitals began using business strategies to control costs. Reinhardt countered that total health care spending rose from 1980 to 2000. With all due respect, his reading of Salgo was obtuse. Salgo's phrase seemed to refer to increasing pressures on hospitals' reimbursement, not total health cares spending. And although Salgo was addressing hospitals, Reinhardt added somewhat gratuitously that "per capita spending on doctors services increased even more rapidly." Of course, while spending on doctors increased, the costs imposed on many doctors, at least those in primary care and other cognitive specialties, increased even faster, so that those doctors' income at best barely kept up with inflation (for example, see this survey.)
• Salgo argued that "publicly traded H.M.O's ... began restricting doctors to an average seven-minute 'encounter' with each customer." Reinhardt countered , "I defy him, or any doctor, to produce a memorandum from an H.M.O. to that effect. During the 1990's, H.M.O.'s did extract discounts from doctors. To keep their income at previous levels, doctors voluntarily shortened visits. The H.M.O.'s were not to blame." Here Reinhardt was quibbling, in my humble opinion. Managed care organizations (and Medicare and Medicaid) drove down fees paid to all physicians, while requiring more paper-work and other bureaucratic burdens that increased all physicians' costs. Since anti-trust laws prevented physicians from collectively negotiating with managed care, whatever objections they had to these changes were ineffective. Managed care (and Medicare and Medicaid) mandated changes in physicians' incentives such that those who still wanted to earn a living had only one realistic alternative, to see more patients. It is true that managed care did not directly "restrict" the time physicians spent on patients. But managed care's control of physicians' financial incentives left physicians little choice. Calling how physicians responded to these changing incentives "voluntary" entails a rather collectivist definition of the word, to put it politely.

One wonders why Reinhardt felt the need to take such a heavy-handed approach to Salgo's cri du coeur. Perhaps economists have little sympathy for such intangibles as the doctor-patient relationship, or perhaps Professor Reinhardt was influenced by interests other than those deriving from his academic position.
Prof Reinhardt turns out to be yet another academic who also sits on the board of directors of multiple public commercial health care corporations.

• He is on the board of directors of Boston Scientific, a medical device manufacturer, a position he has held since 2002.
• He is on the board of Triad Hospitals, a for-profit hospital network, a position he has held since 1999.
• Last, but distinctly not least, he is on the board of Amerigroup, a commercial managed care organization, a position he has held since 2002.

Thus, he has fiduciary duties to uphold the financial interests of all three companies and of all three companies' share-holders. Presumably, it is in the financial interest of the latter corporation to defend the actions of commercial managed care in general against any criticisms by physicians. So was his written put-down of Salgo based on his academic background and experience, or on his corporate fiduciary duties? I cannot tell.
Prof Reinhardt did not reveal his fiduciary responsibilities to these three corporations in his letter to the New York Times. Nor did he reveal them on his official Princeton web-page, nor in at least some of his publications in prominent journals on varying aspects of health care policy since 2002 which I could review. See, for example this article in JAMA, this article in Health Affairs, and this letter in the British Medical Journal. These discussed topics that were likely relevant to the interests of device manufacturers, for-profit hospital systems, and/or commercial managed care organizations. (And the latter two both chided physicians for their interests in preserving or enhancing their incomes.)

So once again I say in summary, it seems that the more one looks, the more examples one finds of academics influential in health policy who also are directors of health care companies, yet who may not have always revealed their conflicts when writing about health care, even when their works relate to the interests of the companies whose interests they were legally bound to protect. So how much of their influential work reflects their professional and academic research and beliefs, and how much reflects their fiduciary responsibilities to commercial organizations? Inquiring minds really want to know.