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Bankrupt Healthcare
Drug Testing Can Make Doctors Rich

Angel Dust may be the drug that explains our health care system. An excellent report in the Wall Street Journal profiles the rise of high-tech drug testing for elderly patients, an often unnecessary expense that costs taxpayers hundreds of millions of dollars each year. In order to prevent patients from abusing prescription drugs, it has become standard medical procedure to test patients for drug use before they start certain treatments. But four years ago Medicare noticed that doctors were testing people too often, and making money off of tests that didn’t need to be ordered. The most common kind of drug test then was urine-based, so Medicare capped the reimbursements it offered for urine tests to discourage over-billing.

The result was that reimbursements for drug testing increased as doctors found other kinds of tests, often high tech, that weren’t restricted by the cap on urine testing. Overall reimbursement for high tech drug abuse tests skyrocketed by 1,423% in five years. Many of the tests were done for types of drug use that are incredibly rare among elderly patients. In 2012 Medicare shelled out $14 million in reimbursements for Angel Dust (PCP) testing, even though older Americans almost never use that drug. Many pain doctors now make more from drug testing than they do from treating their patients. More:

The shift is “a great example of the creativity that results under [Medicare’s] payment system,” which encourages doctors to choose more-lucrative services and perform more of them, said Mark McClellan, a Medicare chief under President George W. Bush. “The technologies keep changing rapidly, and it results in this game of Whac-A-Mole,” Dr. McClellan said.

Wack-a-mole is one metaphor; another is that health care spending is like an inflated balloon. That’s the metaphor used by health care savant David Goldhill in a recent piece in Bloomberg. Goldhill argued that trying to control costs by bureaucratic fiat is like squeezing a balloon while it is being filled with air: the air doesn’t go away, it just migrates elsewhere and distorts the shape of the ballon. Doctors will always find new and creative ways to evade whatever controls a Medicare-like agency sets up. This is a problem without an easy solution, but those who imagine we can fix it by applying still more bureaucratic clamps to the balloon are missing the point.

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  • Andrew Allison

    It seems clear that Medicare has the tools to detect fraud on the part of some doctors. What appears to be lacking is penalties. Perhaps a few of these bad apples should lose their licenses pour encourager les autres. Human nature being what it is, there will always be those (whether doctors, banksters, or run of the mill fraudsters) whose greed causes them to cheat. The only way to fix it is to make detection, and appropriate penalties, more effective.

    • Corlyss

      A systematic process for detecting fraud on, say 80% of the proven fraud areas, is lacking too. Why this can’t be turned into the kind of computer-based expert system is beyond my ken. My assumption as to why it ain’t been done is the facile, cynical “there’s probably too many campaign contributors (to both parties) who profit from things just the way they are.” At least till I hear otherwise. That is the usual reason, given the comprehensive nature of government data collection capabilities, and I’m NOT talking about the harmless phone and internet surveillance to nab terrorists, either. But if the feds can figure out what it is they need to identify likely terrorists conversing with each other, what is so damn hard about figuring out what they need to identify to detect widespread, rampant, not particularly-sophisticated-fraud being accomplished on a wholesale level in Medicare/Medicaid?

      • Andrew Allison

        It’s not just Medicare/Medicaid, but they certainly have the ability to detect fraud (the cited study is one example, the eye-care scam reported here a few months ago another). I still think that’s what’s missing is the “shock and awe” of yanking the licences of some egregious offenders. What we’re talking about here is fraud, plain and simple, and it’s indefensible by the AMA et al.

  • Corlyss

    I wonder how all this marijuana legalization is going to impact drug testing, esp. by employers.

    • FriendlyGoat

      As far as we know, the employers are going to fire people who test positive regardless of whether a legislature or state referendum has legalized something still banned at the federal level. Their workers’ comp carriers will insist on nothing less.

  • FriendlyGoat

    We don’t just give up on public schools because some teachers are bad or because some students are problematic. We don’t give up on attempts at criminal justice because some police, prosecutors, jurors and custody officers are rogue. We don’t give up on taxation because some people evade. We don’t give up on civil litigation because of someone insisting that we can never really adjudicate justice.

    And, contrary to the implication if the end of this article, we do not just give up on a public-sector health plan because some providers are over-reaching profiteers. You whack the moles, whether you like the game or not.

    • rheddles

      We don’t give up on those things because because of a few bad apples, but some are so inherently corrupt when they are over centralized that we need to clear away the bureaucracy centralization requires and return power to the people.

      • FriendlyGoat

        I’m sorry. But I don’t know what that means in this context, and I don’t think you do either. If you did, you’d volunteer some detail.

    • Thom Burnett

      Is that like ‘We don’t give up on Communism just because some countries have done it wrong’?

      • FriendlyGoat


  • Boritz

    It’s considered bad form for doctors to own a pharmacy that they can send their patients to after writing them a Rx. Why not separate the order for a test from the tester? If a doctor thinks someone needs to be tested then send them to an independent testing center where the doc doesn’t get a cut of the action. See if you have as many tests ordered.

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