The Consequences of Breaking the Physicians' "Guild"

In 1988, Alain Enthoven, an original member and driving force of the Jackson Hole group, published a short manifesto about "managed competition." (Entoven AC. Theory and Practice of Managed Competition in Health Care Finance. Amsterdam: North Holland, 1988.) This is now not easy to find (but see Amazon here).

In this volume, Enthoven expounded on his scheme to wrest power over health care from physicians and give it to managers and bureaucrats. Enthoven thought of physicians as part of a tightly organized "guild," that is, an economic alliance. His model for this was a pre-World War II document from a French medical society. Basically, he thought such guilds, which he believed to be in place in all Western democracies except in the UK and Scandinavia, were based on principles that were "not the natural expression of a free market in health care," (p.33) and furthermore, that the guild model associated with health insurance "makes it very difficult for government or private payors to control cost growth," (p.41) while they paradoxically "can also produce poor service (p. 42). To combat physicians' overwhelming economic power, Enthoven called for managers to use "tools they have found to counteract market failure." (p. 98) Finally, he suggested using a coordinated strategy to "break up the guild," noting that "overcoming the guild has not been easy in the United States.... However, the guild has broken down." (P. 122)

Some recent opinion pieces document the consequences of breaking up the guild, and turning health care over to managers and bureaucrats.

Debunking Business Dogmas

US News and World Report reminds us that the conventional wisdom among business managers has often proved to be wrong. Yet many health care managers were big supporters of the dogmas debunked by two two management professors, Jeffrey Pfeffer and Robert Sutton. (See the amazingly titled Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting From Evidence-Based Management) :

• Financial Incentives Drive Good Performance (but instead, they have driven a huge number of health care dollars into the pockets of management, for example, see this recent post).
• First Movers Have the Advantage
• Layoffs Are Good Ways to Cut Costs (still the philosophy of too many health care executives who see everyone, except themselves, as interchangable, and are quick to dispatch those with whom they disagree)
• Mergers Are a Good Idea (but remember the mergers of NYU-Mt Sinai, UCSF -Stanford, and especially the mergers that created the Allegheny Health Education and Research Foundation, all now defunct)
• Life and Work Should Be Kept Separate (which really meant don't treat your employees very well, because they can always return to their lives outside of work).

Let's see how long it takes for the news to get out to health care managers.
A Melancholic Look at the Marketing of Pharmaceuticals
In the Atlantic Monthly, Carl Elliott's take on the commercialization of American health care, and how drug marketing has compromised physicians is a must-read. (Web access requires a subscription. The article was briefly posted in its entirety here, but the Atlantic Monthly forced the web-site to take it down. Therefore, I have provided some key quotes, and hope that the Atlantic Monthly will not find them excessive:

For better or worse, America has turned its healthcare system over to the same market forces that transformed the village hardware store into Home Depot and the corner pharmacy into a strip-mall CVS.

For decades the medical community has debated whether gifts and perks from reps have any real effect. Doctors insist that they do not. Studies in the medical literature indicate just the opposite. Doctors who take gifts from a company, studies show, are more likely to prescribe that company’s drugs or ask that they be added to their hospital’s formulary. The pharmaceutical industry has managed this debate skillfully, pouring vast resources into gifts for doctors while simultaneously reassuring them that their integrity prevents them from being influenced.

Doctors’ belief in their own incorruptibility appears to be honestly held. It is rare to hear a doctor—even in private, off-the-record conversation—admit that industry gifts have made a difference in his or her prescribing. In fact, according to one small study of medical residents in the Canadian Medical Association Journal, one way to convince doctors that they cannot be influenced by gifts may be to give them one; the more gifts a doctor takes, the more likely that doctor is to believe that the gifts have had no effect. This helps explain why it makes sense for reps to give away even small gifts. A particular gift may have no influence, but it might make a doctor more apt to think that he or she would not be influenced by larger gifts in the future.

The late 1980s and the 1990s [were] a period when the drug industry was undergoing
key transformations. Its ethos was changing from that of the country-club establishment to the aggressive, newmoney entrepreneur. Impressed by the success of AIDS activists in pushing for faster drug approvals, the drug industry increased pressure on the FDA to let companies bring drugs to the market more quickly. As a result, in 1992 Congress passed the Prescription Drug User Fee Act, under which drug companies pay a variety of fees to the FDA, with the aim of speeding up drug approval (thereby making the drug industry a major funder of the agency set up to regulate it). In 1997 the FDA dropped most restrictions on direct-to-consumer advertising of prescription drugs, opening the gate for the eventual Levitra ads on Super Bowl Sunday and Zoloft cartoons during daytime television shows. The drug industry also became a big political player in Washington: by 2005, according to The Center for Public Integrity, its lobbying organization had become the largest in the country.

Many companies started hitting for the fences, concentrating on potential blockbuster drugs for chronic illnesses in huge populations: Claritin for allergies, Viagra for impotence, Vioxx for arthritis, Prozac for depression. Successful drugs were followed by a flurry of competing me-too drugs. For most of the 1990s and the early part of this decade, the pharmaceutical industry was easily the most profitable business sector in America. In 2002, according to Public Citizen,
a nonprofit watchdog group, the combined profits of the top ten pharmaceutical companies in the Fortune 500 exceeded the combined profits of the other 490 companies.

During this period reps began to feel the influence of a new generation of executives intent on bringing market values to an industry that had been slow to embrace them. Anthony Wild, who was hired to lead Parke-Davis in the mid-1990s, told the journalist Greg Critser, the author of Generation Rx, that one of his first moves upon his appointment was to increase the incentive pay given to successful reps. Wild saw no reason to cap reps’ incentives. As he said to the company’s older executives, “Why not let them get rich?”

The industry began hiring more and more reps, many with backgrounds in sales (rather than, say, pharmacy, nursing, or biology). Some older reps say that during this period the industry replaced the serious detail man with “Pharma Barbie” and “Pharma Ken,” whose medical knowledge was exceeded by their looks and catering skills. A newer, regimented style of selling began to replace the improvisational, more personal style of the old-school reps. Whatever was left of an ethic of service gave way to an ethic of salesmanship.

Many doctors began to feel as though they deserved whatever gifts and perks they could get because reps were such an irritation.

The trick is to give doctors gifts without making them feel that they are being bought. “Bribes that aren’t considered bribes,” Oldani says. “This, my friend, is the essence of pharmaceutical gifting.” According to Oldani, the way to make a gift feel different from a bribe is to make it personal.

Such gifts do not come with an explicit quid pro quo, of course. Whatever obligation doctors feel to write scripts for a rep’s products usually comes from the general sense of reciprocity implied by the ritual of gift-giving. But it is impossible to avoid the hard reality informing these ritualized exchanges: reps would not give doctors free stuff if they did not expect more scripts.

Drug company–sponsored consultancies, advisory-board memberships, and speaking engagements have become so common,especially among medical-school faculty.... The industry as a whole is hiring more and more doctors as speakers. In 2004, it sponsored nearly twice as many educational events led by doctors as by reps. Not long before, the numbers had been roughly equal. This raises the question, Are doctors becoming the new drug reps?

According to an internal study by Merck, reported in The Wall Street Journal, doctors who attended a lecture by another doctor subsequently wrote nearly four times more prescriptions for Vioxx than doctors who attended an event led by a rep. The return on investment for doctor-led events was nearly twice that of rep-led events, even after subtracting the generous fees Merck paid to the doctors who spoke. These speaking invitations work much like gifts. While reps hope, of course, that a doctor who is speaking on behalf of their company will give their drugs good PR, they also know that such a doctor is more likely to write prescriptions for their drugs.

The semi-official industry term for these speakers and consultants is “thought leaders,” or “key opinion leaders.” Some thought leaders do not stay loyal to one company but rather generate a tidy supplemental income by speaking and consulting for a number of different companies. Reps refer to these doctors as “drug whores.”
Thought leaders serve an indispensable function when it comes to a potentially very lucrative marketing niche: offlabel promotion, or promoting a drug for uses other than those for which it was approved by the FDA—something reps are strictly forbidden to do.

Now for the most melancholy conclusions,

In 1997, John Lantos, a pediatrician and ethicist at the University of Chicago, wrote a book called Do We Still Need Doctors? We will always need health care, of course. But, as Lantos observes, it is not clear that we will always need to get our health care from doctors. Many of us already get it from other providers—nurses, physical therapists, clinical psychologists, nutritionists, respiratory therapists, and so on. The figure of “the doctor” is not cast in stone.

We simply live in a country that has decided that the traditional figure of the doctor is not worth preserving in the face of modern economics. Instead, we put our trust in the market.

Not if Health Care Renewal can help it!

The Seven Minute Visit

Peter Salgo is a physician who is also upset about the demise of the traditional figure of the doctor, but seemingly despairs about doctors' prospects for challenging the managers and bureaucrats. He just wrote an op-ed in the New York Times. He sees the problem beginning when managers broke the physicians' "guild,"

Patients aren't unhappy just because health care costs too much (though they would certainly like it to be more affordable). Rather, people sense a malaise within the system that has eroded the respect they feel patients deserve.

As health-care dollars became scarce in the 1980's and 90's, hospitals asked their business people to attend clinical meetings. The object was to see what doctors were doing that cost a lot of money, then to try and do things more efficiently. Almost immediately, I noticed that business jargon was becoming commonplace. "Patients" began to disappear. They were replaced by "consumers." They eventually became "customers."

Doctors in hospitals all over the country began hearing the same business language and facing the same pressures to "keep things moving." I used to be asked how well my patients were doing. Suddenly administrators were asking how long I was planning on keeping sick people in the intensive care unit.

Yet, he seems to feel a degree of learned helplessness,

Doctors know you cannot provide compassion in seven-minute aliquots. But we have felt powerless to change things. The medical establishment has, many of us feel, simply rolled over and gone along to get along. It has sacrificed patients' best interests on the altar of financial return.
This leaves the solution to the problem in the hands of our patients. You, the patient, are the system's best hope. Evaluate what it is you expect from your doctor, then ask for it. If you are unhappy with your doctor, fire him. If you cannot get more than a seven-minute face-to-face encounter with your doctor, he needs fewer patients.

The problem with this scheme, of course, is that primary care doctors are getting scarcer and scarcer. The American College of Physicians just reported, for example, that the number of medical school graduates training in general internal medicine has reached a new low. So in my humble opinion, we doctors cannot just wearily leave the field, hoping that patients alone will be able to take on the bureaucrats and managers. The doctors, along with other health professionals, and patients are all in this mess together, and we will all need to work to clean it up.

I do agree with Salgo's hopes for the results of doing something.

In one respect the business people are right. Restoring the doctor-patient relationship will not save anyone any money. But I submit that it doesn't have to. There are other ways to curtail health care costs. Some involve high technology; others do not. None of them requires patients to sacrifice their self-respect.

We can and must reduce health care expenses. But we cannot do it at the expense of patients' well-being. The doctor-patient relationship is critical to the integrity of the health care system. It is not disposable. Turning doctors into shopkeepers who regard patients as customers is unacceptable.