Doctors Work the System to Increase Income – at the Patient’s Expense

Found an interesting op-ed from the Dallas News online yesterday, written by Dr. Steve Cole entitled, Biggest factor in rising health costs are the doctors themselves.” Unfortunately, the title doesn’t even begin to touch the content, so many folks will miss this enlightening piece — a piece that should be read by everyone who has an interest in the costs of healthcare.

The article explains many of the reasons healthcare costs go up based on a doctor’s wants and needs and not necessarily on the best interests of the patient. There are a few statements that should make all of us pause — because they speak to the real problems of increased costs. I give Dr. Cole plenty of credit for citing these points — and no doubt he’s taking plenty of flak from his physician-colleagues for raising them.

Doctors don’t order tests, or refer their patients to other specialists because they are necessarily best for the patient. They do so because there is a financial incentive to do so. Such as:

  1. A doctor orders a medication for his patient because he gets a higher reimbursement for that patient’s visit. The patient is considered to have a “more complex” ailment.
  2. The same is true for ordering a diagnostic test. Diagnostic test = higher reimbursement for that particular visit.
  3. A doctor will refer his patient to an additional consultant / specialist for the same reason. Only this time there is an additional financial incentive. By making the referral, he becomes part of an inner circle of sorts — and eventually may be rewarded by those specialists for sending patients their way. Sort of a medical referral commission, in effect.
  4. Dr. Cole suggests that much of the test ordering is about staving off litigation, too. Honestly, however, I’m not so sure it’s a fear of litigation. Instead I think it’s CYA (cover your a**) — because, if a medical error or misdiagnosis results, then all the tests in the world won’t avoid litigation. Instead, I think it’s just about having all that data and evidence amassed just in case there IS litigation. (As in, “But your honor. I tried to do it right! Look! I ordered all these tests!”)

What’s the bottom line for us savvy patients? When we think as patients — people with symptoms who need a diagnosis — we want to be sure we are getting the RIGHT tests and visiting the RIGHT specialists. We can determine that, at least fairly closely, by asking our doctor some questions. Why are you ordering this test? What do you expect it will tell us? What if it doesn’t tell us that? Is there another test that will be required? — or — Why do you want me to visit that specialist? Is there any other specialty that might might address the symptoms I’m having? And why are you sending me to this particular doctor? (if you determine it’s because they are friends, or are in the same practice, or even down the hall, then you’ll want to assess whether that doctor truly is the best one for you to see.)

When we think as consumers, then we want to be sure we aren’t getting any more tests than necessary, and that the cost of the test is fair. The literature is rife with doctors ordering tests only because they own the testing equipment and can bill insurance for it! That doesn’t necessarily help the patient, but it most definitely helps the doctor’s bottom line.

Truth is — doctors deserve to make a living and they deserve to max it for themselves, too. I don’t think it’s the doctors who are at fault for taking advantage of this system that is set up, like so many others, to fail patients. It’s more a question of looking at how reimbursements are made, and whether they support a patient-centered model of care.

And that’s another blog post for another day.

……………………….. See Follow Up Post to this Discussion ………………….

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Posted in: Doctor Communication, Health /Medical Consumerism, Health Insurance, Healthcare Quality, Media, Medical Errors / Mistakes / Misdiagnosis, Patient Empowerment, Patient Tools

Leave a Comment (15) ↓


  1. Fred Munzer DO December 18, 2007

    You are so full of nonsense you do nor have a clue. I have been a physician for over 20 years and no one I know operates that way. DREAM ON!

  2. Trisha Torrey December 18, 2007

    Dr. Munzer — as you can see — I don’t make this stuff up. It came from the Dallas News and Dr. Steve Cole. If you have issues, take them up with him.

    That said, let me tell you how much I appreciate that you and your colleagues don’t operate that way.

    But I also see that my statement “taking plenty of flak” seems to be applicable.

    Thanks for posting.


  3. Janice December 18, 2007

    Another way for them to “make a little money?”. Try checking on the “helicopters” that are needed to “life flight”. When you do… please also find out if they walk out the front door of the hospital on the “same day”. All I ask is that you please check it out. You will be amazed yet the trip to the hospital (that could have been done with ambulance) costs anywhere from $8000 to $15,000. Just see how many are not serious.

  4. Terri December 18, 2007

    As a healthcare professional for over 20 years, I have witnessed the change from “patient oriented” care to “profit oriented” care. As well, I have seen all too clearly the situation Dr. Cole refers to; it is real, and it is purely greed. Perhaps some physicians still operate with ethics, but there are far too many who do not – in addition to hospital administrators.

    “Let the patient beware”!

  5. Edward Hirsch, M.D. December 18, 2007

    I have never seen any evidence that ordering a test or a medication or a referral allows a doctor to code for a higher level of care. If you look at a copy of CPT codes, they usually (the one in my office does) have a list of the requirements for each level of coding. In order to justify coding for a level of service, you have to hit all or most of the “bullets”. I have never seen bullets for treatment, testing or referrals. The bullets I have seen are for history, exam and decision making. I am a specialist and I have benefited from the legal climate in my state (FL) as I get called in on cases that a competent internist/family practice doctor should be able to handle on their own. However, I don’t order tests for CYA nor do I order meds for any purpose but to make the patient better.