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A Problem Unique to Private Medicine?

This New York Times' investigation of a rogue cancer unit within a Philadelphia Veteran's Administration hospital is disturbing stuff. In essence, it seems that Dr. Gary Kao has been performing bradychardias -- a treatment for prostate cancer -- with a terribly high error rate, and using a variety of clerical tricks to cover his mistakes. No one has died, but dozens have suffered.

It's a particularly striking tale because the VA hospitals have been a tremendous success story in recent years. A few decades ago, the system was a mess: underfunded, poorly-managed, and the epicenter of a seemingly continuous number of horror stories. But under the Clinton administration, the trend changed radically. By the end of the decade, the VA was arguably the single best system in America. Most people find that hard to believe. But Phil Longman, who has written comprehensively on this subject, makes the point nicely by running through the independent evaluations:

Who do you think receives higher-quality health care. Medicare patients who are free to pick their own doctors and specialists? Or aging veterans stuck in those presumably filthy VA hospitals with their antiquated equipment, uncaring administrators, and incompetent staff? An answer came in 2003, when the prestigious New England Journal of Medicine published a study that compared veterans health facilities on 11 measures of quality with fee-for-service Medicare. On all 11 measures, the quality of care in veterans facilities proved to be "significantly better."

Here's another curious fact. The Annals of Internal Medicine recently published a study that compared veterans health facilities with commercial managed-care systems in their treatment of diabetes patients. In seven out of seven measures of quality, the VA provided better care.

It gets stranger. Pushed by large employers who are eager to know what they are buying when they purchase health care for their employees, an outfit called the National Committee for Quality Assurance today ranks health-care plans on 17 different performance measures. These include how well the plans manage high blood pressure or how precisely they adhere to standard protocols of evidence-based medicine such as prescribing beta blockers for patients recovering from a heart attack. Winning NCQA's seal of approval is the gold standard in the health-care industry. And who do you suppose this year's winner is: Johns Hopkins? Mayo Clinic? Massachusetts General? Nope. In every single category, the VHA system outperforms the highest rated non-VHA hospitals.

Because the VA is a socialized oasis within the American health-care system, this success has become a bit of a political football. And so it's unsurprising that Megan McArdle jumped on the New York Times story. "I suspect this is also one of the things that can only happen at the VA," she wrote.

It would be surprising if incompetent doctors covering up their mistakes was a problem specific to the VA. Megan's argument is that any private hospital would be terrified of being sued, and so would never allow such shenanigans to continue. I'm curious, then, to hear her explain the case of California's Redding Medical Center, which specialized in cardiac surgeries. The Heart Institute there was headed by Dr. Chae Hyun Moon and Dr. Fidel Realyvasquez Jr., both of them well-respected surgeons.

At least, they were until the FBI raided their offices.

The Redding Medical Center, it turned out, was performing profitable operations on patients who didn't need them. A full half of their surgeries were found to be unnecessary, A quarter were foisted on patients with no serious heart problems whatsoever. Thirty-eight-year-old rancher Steven Hunt made the mistake of setting foot into their unit in late 2001. He was opened up for a bypass operation two days later. Not long after, the incision developed a hernia, and his upper-body strength deteriorated, ending his work as a rancher. The tragedy of it all was that Hunt suffered from nothing more than high blood pressure, easily controllable through medication and diet.

You could say, of course, that this sort of scandal could only occur within a private health-care system. Indeed, you'd probably be right about it: Doctors at the VA don't make extra money for performing more surgeries, and so they have no incentive to foist unnecessary treatments on healthy patients. But that's probably not a helpful way to conduct this debate.

By Ezra Klein  |  June 22, 2009; 12:05 PM ET
Categories:  Health Economics , Health Reform  
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Bradycardia is a slow heart rate. Brachytherapy is the treatment referenced in the article.

Posted by: ehayes1 | June 22, 2009 1:06 PM | Report abuse

Re: your last point: it's notable that Dr. Kao was a contractor, not a VA employee, and presumably did receive a per-procedure fee. However, its hard to understand the reason for VA's actions to cover the situation up over such a long period of time, and the story does not do much to probe this issue. It did note that the VA's most experience center for the procedure involved was in Seattle - I suspect they may have been under pressure to provide this service in more hospitals than the number of cases could economically justify, and so were taking shortcuts in trying to keep the service available. Nevertheless, its a horror story all around.

Posted by: exgovgirl | June 22, 2009 1:11 PM | Report abuse

I think I'd agree with Megan McArdle that this could be the sort of problem unique to VA and their weird regulatory structure.

I think there’s a bit of a phantom-argument behind the scenes here. It’s sort of implied, “Are facilities with robust quality systems that get high quality scores actually high in quality?” I think that’s a debate worth having and an important one, but I don’t think that’s what is happening with this VA. The quality reporting systems at work (JCAHO, NCQA) aren’t designed to capture these sorts of errors. That’s the work of the peer-review panels mentioned in the NY Times article (also, I like Longman’s article but he doesn’t really understand NCQA it seems. The ranking is not on 17 indicators; it’s more like 60 quality indicators, 110-170 patient satisfaction indicators, and an exhaustive audit of files and processes, and it’s to evaluate plans, not hospitals – though including hospital-owned plans).

As a federal entity, the VA sort of plays by its own set of rules which occasionally can make it a magnificent change agent or the setting for spectacular failures. The stuff they do really, really well is innovation. As there’s no need to woo a conservative board of directors or wait for physician buy-in to bring in new processes and procedures, they can just make announcements that say hey, we’re the boss and we say you’re all switching to EHR’s in 6 months. I can’t speak to the culture within VA’s but I do suspect there’s a great deal of variance among them and it is no doubt different than the private world as malpractice as proven under the Federal Tort Claims Act is very different than malpractice in a private hospital. Maybe that makes fear of suit less acute? I dunno. Seems possible. Seems possible also that the relationship with the consultant in the story was outside SOP and that’s where the failure came from. Bringing in Ivy League experts to do a process was probably done, frankly, because no one at the VA knew how to do it. In other words, if there was anyone at the VA qualified to quality check the program, they wouldn’t need to bring in outside consultants.

Posted by: ThomasEN | June 22, 2009 1:27 PM | Report abuse

The Redding Medical Center story is mind boggling, I saw it on 60 Minutes. I got three quotes on someone finishing a $5000 bathroom in my house. I am definitely getting a second opinion on a bypass operation.

Posted by: staticvars | June 22, 2009 1:39 PM | Report abuse

Kind of amazing that people are slamming the VA system, which (far, far, too late) actually succeeded in catching Dr. Kao for his alleged imperfidities.

The Ivy-league medical school where he worked, researched, and was on faculty? The highly respected institution that was the source of his credentials? Didn't seem to notice anything wrong.

As of this article he was still researching, though he'd voluntarily stopped seeing patients (I am DYING to know when exactly that happened--before or after a NYT reporter called the University for a comment on this story?)

Talk about perverse incentives. Catch an allegedly bad doc allegedly up to no good...and get slammed for it. While the institution that gave him a fancy title and never saw any problems gets off scott free.

Posted by: theorajones1 | June 22, 2009 2:40 PM | Report abuse

Here is some more good information on the various issues surfacing around the VA:
Another VA Hospital Scandal: Botched Prostate Cancer Treatments:

Posted by: Cynthia111 | June 22, 2009 2:52 PM | Report abuse

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