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. Mike Jones December 19, 2007

    My doctor recently stopped telling me the results of my blood test’t on the phone after a visit .. She mad eme come in to get my results… She told me this was “How it was to be done now”.. turns out she was double billing my insurance company.. Once for the initial visit and again for the follow up… I switched doctors… Doctors also get a lot of “perks” from the drug company’s… trips, gifts, food etc…..

  2. Mike Jones December 19, 2007

    Dr. Hirsch.. You sound like a good doctor.. But there are doctors out there who are not as ethical as you… There are doctors out there who are lining theirr pockets with our money and the money of our insurance companies…. Have you ever heard of insurance fraud?

  3. anonymous December 19, 2007

    The statement that physicians do something because they get better paid for doing things like ordering medications is not something that can be proven. The assertion that the coding guidelines reward people for doing something also has not been confirmed. For most of my visits, whether I change a medication or not, I do not get a different amount of reimbursement. I can tell you most doctors do not have the time to learn intricate details of coding as you suggest.
    I don’t read that Dr. Cole says doctors do things ‘because’ of more reimbursement, as much as more tests and more consultations result in higher income, as in most walks of life.

  4. justanordinaryjoe December 19, 2007

    Any one who credits the increasing cost of medical care to a single reason has no credibility to me.

    Here’s a short list of increased causes:

    1) A sicker US population. Obesity, diabetes, some cancers, musculosketal problems, cardiovascular diseases are all more prevalent than 50 years ago and are lifestyle driven.

    1B) An aging population.

    2) The pharmaceutical industry has corrupted both doctors and politicians. They have a monopoly with no free market pressures. Other countries negotiate directly with drug companies and pay much less than we do.

    3) The insurance companies have hired specialists to find ways to save costs, causing the medical industry to hire people to find more revenues. We’re paying for both of them.

    4) Pre-emptive malpractice defense is a very real issue. A health care provider can practice their whole life, then lose it all because of a suit from the last person they saw before retiring. With no caps on liability, awards can exceed the maximum obtainable coverage. Additionally the level of documentation/charting/record keeping has become ridiculous.

    5) HIPPA Unneeded legislation that costs healthcare providers a fortune and created a whole new federal beaurocracy.

    6) Patient’s who want every test and every drug known to man. Some come to the doctor simply for attention. Many expect that life should be free of any pain discomfort or problem. Patient’s who are drug seekers, disability seekers or looking for a huge claim against an employer or the person who injured them in a car wreck. A small percentage of the population incurs a large percentage of medical costs.

    7) High technology. It improves health care, but comes at a large cost.

    That’s my short list. There is no easy fix, and a single payor system would not get to half of the problems. Reigning in the pharmaceutical industry would be a good first step.

  5. anonymous December 19, 2007

    Please consider reading the following article:

    Contrary to what the posted article states, the majority of physicians are practicing ethical, patient-centered medicine. Lining their pockets, they are one of the only professional groups who continue to decline in their salary. With the hours primary care physicians work, they would make more being teachers. After practicing for 8 years, I’m not making $100,000. Think that’s still a lot, not for 60 hours a week at least, plus night time call for which I get nothing, plus the paperwork for which I get nothing, plus the phone calls to patient’s insurance companies for which I get nothing, plus all the patient phone calls for which I get nothing.

    Medicare now pays less than they did in 2001 for an office visit, yet each year the costs of providing medical care has gone up approximately 6%. It sure weren’t the greedy doctors referred to in your post that were getting the money.

    Want to talk about kickbacks, it’s very rare in medicine. One should see the gifts received by Congress by lobbyists. Doctors hardly get more than a scratch pad and a pen from the pharmaceutical companies now. In 12 years of medicine, I’ve never been offered a trip or an expensive gift.

    I would challenge Dr. Cole to provide evidence for his statements.

    The only doctors who get more money for procedures are those who perform them, not the doctors who send them. They wouldn’t be sent if it wasn’t thought important, because each procedure has its own risks. I don’t know of any specialists providing kickbacks to referring physicians.

    The majority of physicians are trying to provide good medicine to the people who have entrusted their health to them.