The Rule

I really did not want to be negative when I read a number of articles updating Walmart’s and other large employers’ efforts to encourage employees to use physicians consider the “best” in their area of expertise as a way to decrease the cost of health insurance. Then I remembered my rule:

When a company or the government says it is about quality and saving money, it is about saving money.

The lead sentence is a recent Wall Street Journal article inadvertently could not have been any clearer:

“Walmart and other employers want more say over which doctors care for their workers, and they are ramping up efforts to pick and choose physicians in health plans as they seek to reduce health spending.”

Pick and choose physicians? A laudable goal, I guess, but a little frightening when you think about it.  Do you really want your choice of doctors determined by someone whose bonus or stock price is tied to financial performance?

The article relates how Walmart has developed a network of physicians they have deemed the “best” and provides incentives for their workers to travel, if necessary, for consultation and treatment by those doctors. Those incentives are meant to guide the decision making by employees to the financial benefit of the employer and secondarily (maybe, possibly, hopefully) result in better quality care..

The assumption is that the care provided to those workers would be better, not to mention cheaper.  The evidence for the “better” part of that assumption is shaky.

Identifying top performing doctors is still a mix of science leavened with a healthy dose of voodoo.  Measuring physician performance is difficult.  Measuring who is a cheap physician is not.

The idea that the plan of care developed by the chosen doctors is an improvement over what a local doctor may think is equally dubious.  In fact, what Walmart is doing is further fragmenting care.  They are looking at sourcing health care the same way they do for the merchandise they sell.  But as Walmart proudly proclaims, it has saved them money.

Walmart employees who choose the travel option will save money.  They get whatever procedure the “better” doctors perform at a reduced co-pay or deductible amount.  Walmart pays the doctor at a negotiated discount rate.  Everyone is happy.

So what happens with the necessary local follow-up care where the Walmart patient lives?  It is one thing to travel hundreds of miles to have back surgery performed by the annointed surgeon but  the “lower” quality local  doctor or hospital is expected to provide that follow-up care.  Good enough to do the follow-up but not good enough to do the procedure.   What’s with that?

The evidence for the success of such programs is anecdotal.  According to the Wall Street Journal, Walmart, Lowe’s and McKesson Corp (which is a vendor of expensive goods and services to healthcare providers) “saved” $19.4 million for spine surgery provided to their employees under the programs.  Just how they “saved’ and the basis of comparison is  hazy and the total amount is not even a rounding error for these huge companies.

It seems to me that tangled in all this may be an absence of a degree of fiduciary responsibility when your employer selects a doctor and steers you to that doctor.  If you have a financial advisor who is a fiduciary you know that he or she does not financially benefit from whatever specific investment they recommend.  Their only interest is do what is best for their clients.

That is not the case with what Walmart and other large employers are doing.  Their first imperative is to save money.

An interesting question:  Suppose under this scheme,  quality improves but costs increase? Would these companies be as interested?  I think I know the answer.

While high quality is not always more expensive, there are many instances where high quality does mean higher expense.  It depends on the definition of quality being used.  As in most of life, you get what you pay for.

There is another time proven way to make sure that a medical course of action is the best–get a second opinion independent of your employer or health plan..  At NorthBay Healthcare, we became part of the Mayo Clinic Care Network and that allowed our doctors and patients to seek a second opinion from the preeminent medical group in the world.  There is no cost to the patient for these second opinions.  That is a better option, free of self-serving conflicts.

Over the years I have grown leery of grand schemes to save money developed under the guise of quality.  I know that is not politically correct.  It is absolutely backward thinking, sufficient to get me booted out of the council of wise people in healthcare. That’s fine with me since I am on the beach and now know that the wise people in healthcare are not as wise as they think they are.

Call me a cynic but I still believe in The Rule:

When a company or the government says it is about quality and saving money, it is about saving money.

Always keep The Rule in mind when organizations with built-in conflicts of interest want to make healthcare decisions for you.






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