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February 13, 2017
RESOLVING MEDICINE'S LATEST CONFLICT: COST VERSUS CARE
By: Kaveh Safavi

What happens when patient needs clash with the bottom line

For medical practitioners, the call to act in a patient’s best interests dates back to the Hippocratic oath. But what happens when this conflicts with fiduciary responsibility?

This question has been brought to a head with the advent of healthcare payment structures designed to mitigate rising cost concerns, such as Managed Care Organizations (MCOs) and Accountable Care Organizations (ACOs). As participants in these structures, physicians are empowered to act as fiduciaries for risk-bearing institutions, such as employers, health plans and health systems.

Herein lies a potential conflict of interest. Perhaps a doctor must choose between optimal treatment for an individual patient and compliance with cost-containment pathways and protocols. Perhaps a patient needs an MRI scan but the cheapest one is two hours away.

Medical professionals are increasingly savvy about financial realities, but when does this threaten their ability to put patients first? To examine the potential economic magnitude of this conflict, Accenture divided total healthcare spend into three qualitative levels, depending on the impact of the physician’s fiduciary duty.

The first level involves trivial costs. This encompasses most low-acuity and/or low-spend items such as health and wellness services (gym membership, diet programs), dietary supplements, cold and allergy medication, and optometry. This category accounts for just 3 percent of total U.S. healthcare spend.

The middle level involves material but not significant costs. Examples might include pediatrician visits, primary care, dental services, ophthalmology, and antibiotics. These types of products and services account for about one-third of total healthcare spend in the United States.

The highest level entails the most significant cost. Examples include cancer treatment, specialty medication, and most rare diseases. These are complex, high-stakes services and products that typically need to be tailored to each patient and account for nearly two-thirds (63 percent) of total healthcare spend.

It is here the question of balancing fiduciary responsibility with patient care is especially acute. I expect the accountability dilemma will sharpen with the rising cost of new treatments (fiduciary duty to risk-bearing institutions) and increasing asymmetry of information (fiduciary duty to patients).

My colleague Finney Gilbert has some ideas about addressing this issue he will share in an upcoming blog post. What are your thoughts regarding this critical matter?

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