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Wall Street, lawyers and doctors

June 2009

Lawyers and Wall Street types have long headed up every list of the most highly paid professionals.

But the Great Recession has wreaked havoc on their earning potential, and the question doctors may be asking is: Are we next? We can certainly find parallels between the rise and fall of those professions and the unknown future of ours.

When looking at Wall Street’s collapse, it is easy and perhaps comforting to believe that they brought this economic mess on themselves (and, sadly, the rest of the country). While economists and politicians alike have debated the source of Wall Street’s demise ad nauseam, I believe a consensus summary of talking heads might run thus: “They created nothing out of something.”

The “something” was an otherwise healthy economy, while the “nothing” was encouraging consumers to engage in risky financial ideology (houses that will invariably appreciate 10% every year, stocks that won’t be subject to the vicissitudes of bear markets, etc.). All the while, they were turning real assets into bizarre derivatives to be sold and resold, repackaged and sold again, as if the mere act of reformulation created intrinsic value. In what is a multi-trillion dollar understatement, it didn’t work. Eventually, the entire house of cards came a-tumbling down.

Where is the parallel for physicians? Twofold. Exhibit A, at least to my mind, is the way we so industriously do things that create this same “nothing out of something.”

I believe our “nothing” is our profession’s tendency to perform multitudes of tests and procedures that have no proven value to patient care. Payers keep reacting in an effort to control these spiraling costs, making medicine a complex business. Here’s one example: Based on a recent study, primary care physicians spend a full third of their revenue in efforts to collect that revenue from patients’ health plans.

Those are more wasted resources that could be spent taking care of patients, more “nothing.” There’s no need to rehash all the data, but it comes as no surprise that, as Atul Gawande’s recent New Yorker article pointed out, we spend twice as much on health care than any other industrialized nation while still ranking near the bottom in terms of quality, efficiency, and access.

Exhibit B: We cannot sustain spending all this money on this nothingness, which is analogous to doling out $10 million bonuses to CEOs who bring down company after company. Any light at end of the tunnel for the current recession will likely be the $2.4 trillion health care freight train, which now promises to curtail any true economic growth.

Chewing up a greater chunk each year of GDP like a necrotizing infection, the richest country in the world is ironically doing itself in with its health care mess. Sadly, more sobering details of this stranglehold emerge every day including the fact that 50% of all bankruptcies are due to medical debt and that 1.5 million Americans are losing their homes each year as a direct result of those bankruptcies.

Although attorneys are far from down-and-out, we’re seeing mega-law firms that were created at the turn of 20th century going under. Most of this is fallout secondary to the recession, which has had a particularly devastating effect on firms that depend on the billable hour. In such a payment system, the more you do, the more you’re paid, regardless of how efficiently you work.

Fee-for-service anyone? Our system of payment is subject to the same rule of law: The more we do, the more we get paid. For most people, the Dartmouth data bear clear witness to the inefficiencies of such a payment model. Today, more law firms are offering their services for a flat fee. Payment bundling will almost certainly become our equivalent.

Can we collectively work to mitigate the need for extensive reform, learning from the fate of our professional colleagues and improving the effectiveness of our current reimbursement model? In a recent NEJM editorial by Berwick et al, they tackle the question of how physicians can start to move to that achievement.

“One simple way for physicians to start contributing to this goal,” they write, “is by reassessing and scaling back, where appropriate, their use of clinical practices now listed as ‘overused’ by the National Quality Forum’s National Priorities Partnership.”

Three words: Not Gonna Happen. Although we may have the will, we simply do not have the way to self-regulate in a system composed of perverse reimbursement models, malpractice fears and often unrestrained patient expectations. I also don’t believe we are doing ourselves any favors as a profession when we come out swinging against reform like the AMA recently did.

Obviously, we can stretch analogies between lawyers and Wall Street types only so far. The need for our highly specialized skills only intensifies during a recession, which is already evident to many of us. But while our profession may be more secure than that of our legal or financial colleagues, that security is coming up against a mandate.

According to the Kaiser Foundation, 61% of Americans believe “it is more important than ever to take on health reform now.” That means meaningful reform that could fundamentally alter our practice–changes not quite on a par with the end of bloodletting, but changes that will nonetheless radically transform health care as we know it.

I have my concerns. But I suspect I stand with the majority of doctors–or at least hospitalists–when I say: not a moment too soon.