State Medical Boards and the Problem of Unnecessary Care and Treatment

Sounding an alarm, the Institute of Medicine (IOM) in a September 2012 report called upon the health care community to reduce wasteful and unnecessary spending on health care services.1 The cause for concern was an estimated $750 billion loss in 2009, or about 30% of that year's total spending. Pointing to the complexity of the nation's health care system, the IOM contended that the responsibility for addressing the problem “rest[ed] on many shoulders,” and that a concerted effort involving payers of health care, individual and institutional providers, consumers, and regulators was needed. Among those that the IOM singled out for assistance were state licensing boards.

The IOM's inclusion of state licensing boards was unusual. Recent efforts to reduce waste and duplication have focused on system-building — organizational integration, data infrastructure, workforce collaboration, and patient-centered care. While these largely systemic approaches to health care delivery should reduce wasteful spending, such measures do not directly address individual accountability for overutilization. Because the health care industry is so labor intensive and because patient care is often episodic and idiosyncratic, the cumulative decisions of physicians can influence the total cost of health care delivery substantially. Doctors, in other words, are important to containing costs in America.

For at least two reasons, state medical boards should embrace the IOM's challenge and join with other groups and organizations that seek to reduce wasteful spending. First, as noted, about 30% of all health care costs in the United States can be attributed to wasteful spending, much of it on out-patient medical services, a cost component that can be tied closely to physicians' treatment decisions. Second, the overutilization of diagnostic tests and surgical procedures increases the risk of infections, diseases, complications, and poor patient outcomes. This is a matter of public protection.

Though state licensing boards can discipline physicians for unprofessional conduct, only thirteen boards have an explicit disciplinary provision in their medical practice acts or statutes that pertains to unnecessary care and treatment. These states are Alabama, Arkansas, California, Colorado, Florida, Kansas, Maryland, Missouri, New Mexico, New York, North Dakota, Vermont, and Wyoming (Table 1). Yet, boards in these states infrequently apply such provisions to offending physicians. Of those that publish their results online, only California, Florida, Missouri, and Vermont regularly appear to discipline licensees for overutilization.2 

There are practical reasons for state boards' reluctance. These include difficulties in determining precisely what unnecessary care and treatment entails and in establishing or setting parameters for disciplinary action. Unlike most cases which require peer review to determine a breach of the standard of care, doctors' technical skills may not be at issue. Because unnecessary care and treatment is so widespread, moreover, boards likely will get pushback from physicians who may view such oversight as anticompetitive.

Notwithstanding these and other challenges, boards have a role to play in controlling the overutilization of health care services. Physicians who routinely order unnecessary tests or perform questionable procedures very likely harm their patients. In many such instances, disciplinary action would seem appropriate.

Of the three main goals of health policy — increasing access to care, controlling costs, and enhancing quality — cost control clearly has emerged as the significant challenge of the twenty-first century.3 The spending gap between the United States and all other countries for which the Organization for Economic Co-operation and Development (OECD) collects data is quite large and is growing. Accounting for inflation and purchasing power parity, total per capita health expenditures in the United States averaged $356 in 1970, $1,102 in 1980, $2,851 in 1990, $5,993 in 2003, and $8,233 in 2010, almost double the amounts in recent years for the next closest spending nations.4 

Close examination of available OECD data for certain countries for the years 2003–2010 reveals that the United States exceeds spending levels in several provider categories, especially for outpatient medical services (Table 2). While the mean expenditure ratios for inpatient vs. outpatient care are 53:47 for Australia, 64:36 for France, 55:45 for Germany, and 50:50 for Japan, they are almost the reverse for the United States and Canada — 30:70 and 39:61 respectively (Table 2). Yet, the United States spent $759 more on inpatient services and $3,018 more on outpatient services for each person on average than did Canada for the years indicated (Table 2).

What explains the huge gap between the United States and other countries in per capita spending for outpatient medical services? Opinions vary. They range from greater access to the latest technology in the United States to the higher incidence of chronic diseases, from overreliance on specialists for primary care to greater costs and overhead, and from enhanced exposure to lawsuits for medical malpractice to fee-for-service payment practices and intense market competition.5 Combined, these factors significantly have influenced the practice of medicine in America.

Some recent studies have attempted to identify more precisely the distinguishing features or components of greater U.S. spending. According to a 2007 Congressional Research Service report, “intensity of service delivery,” by which the report's authors mean “the amount of services used in a given health care encounter,” is a distinguishing feature.6 It is not the number of doctor-patient encounters that explains why the United States spends more. Rather, it is the greater number of services provided — tests run and procedures performed — per encounter, combined with higher than average unit prices for these services. “The United States uses more of the newest technologies and performs several invasive procedures (such as coronary bypasses and angioplasties) more frequently than the average OECD country,” the report's authors said.

One way to measure the intensity of service delivery is to divide per capita expenditures by the number of times on average that patients see their doctors. Notwithstanding higher per capita costs in the United States, average annual physician consultations are significantly lower.7 This translates to a much higher level of services per physician-patient encounter. Figure 1 displays the large difference between the United States and other nations as measured by service intensity.

As the above findings demonstrate, U.S. doctors more frequently employ expensive tests and procedures to treat their patients than doctors in foreign countries. Does this mean that many U.S. doctors are over-treating their patients or that a substantial number are conducting unnecessary tests and procedures on them? “Yes,” say many analysts and observers.8 

Leading health policy analysts Donald Berwick and Glenn Hackbarth estimate that between $158 billion and $226 billion of wasteful spending occurs each year because of overtreatment.9 Overtreatment, they say “comes from subjecting patients to care that, according to sound science and the patients' own preferences, cannot possibly help them — care rooted in outmoded habits, supply-driven behaviors, and ignoring science.” Researchers Christine Cassel and James Guest agree with the assessment of Berwick and Hackbarth.

“The initial focus” in reducing costs, Cassel and Guest assert, “should be on overuse of medical resources, which not only is a leading factor in the level of spending on health care but also places patients at risk.”10 

Why do many doctors in the U.S. engage in wasteful spending practices, including the overutilization of health care services? As already mentioned, there are a number of compounding factors, many unique to America. Among these compounding factors, physicians frequently point to the threat of lawsuits to justify excessive tests and procedures. Fear of being sued is a legitimate concern, to be sure, but it should not obscure efforts to curtail unnecessary tests and procedures that enhance doctors' income at the expense of their patients' welfare.11 

Though monetary incentives always have existed, the medical profession before the 1970s exerted greater influence over practitioners' economic behavior. For much of the twentieth century, the vast majority of doctors shared similar views, beliefs, and experiences, forging common bonds among them. Most belonged to the American Medical Association and their state and local medical societies; few breached norms of conduct concerning economic and social matters. Professional associations and state medical boards rarely had to take disciplinary action because informal sanctions, loss of referrals or even hospital privileges, were so consequential.12 Professional norms, values, and ethics, as economist Kenneth Arrow noted in a famous article penned in 1963, checked physicians' desires to profit at the expense of patients and fellow colleagues.13 “[T]here is a ‘collectivity-orientation,’ which distinguishes medicine and other professions from business, where self-interest on the part of participants is the accepted norm,” Arrow noted.

The commercialization of medical practice in recent years has attenuated these former countermeasures.14 Efforts of professional associations to reduce competition among physicians came under intense scrutiny in the late 1970s when policymakers, seeking to control rising costs, applied principles of economic theory to the health care industry. Specifically, courts and federal agencies struck down certain provisions in the AMA Code of Ethics as anticompetitive, sending a stern warning to the AMA, state, and local medical societies to curtail their enforcement activities.15 The rise of the national specialty societies, coupled with the AMA's loss of membership and prestige at the end of the twentieth century, meant that no single organization spoke for physicians on professional matters. A “unified profession has given way to power blocs of specialists” or “fiefdoms,” renowned medical historian Rosemary Stevens concluded.16 

Just as current practitioners face fewer professional constraints than their predecessors, so they encounter greater temptations to violate their ethical responsibilities. A sizeable majority of today's practicing physicians are board-certified specialists with advanced training in areas such as orthopedics, cardiology, or oncology. Recent technological innovations have allowed many specialists to perform surgery in ambulatory facilities that they themselves own or jointly own with others. Those in medium to large group practices often compete with hospitals and other physician groups along service or product lines based on specific diseases (cancer) or organ systems (heart, spine). Ancillary services, frequently of the diagnostic variety (computed tomography [CT] scan and Magnetic Resonance Imaging [MRI]), can supplement doctors' incomes substantially.17 

Physician ownership of outpatient facilities has contributed significantly to the sharp increase in costs and procedures. Seth Strope and colleagues found, for instance, that “the conversion of [physician] non-owners to [physician] owners” was associated with a 53% rise in urological surgeries in Florida surgical centers for the period 1998 to 2002.18 Louise Pilote and colleagues, moreover, linked the supply of catheterization laboratories to an increase in heart bypass surgeries.19 Other studies demonstrated that similar increases occurred when physicians acquired diagnostic imaging equipment.20 

The substantial rise in the number of outpatient procedures reflected in the Strope, Pilote, and other studies raises serious concerns about the overutilization of medical services and the increased potential for poor patient outcomes. Researchers have shown, for instance, that unnecessary exposure to ionizing radiation increases the incidence of cancer,21 that excessive prescribing of antibiotics lessens resistance to infections,22 and that overuse of heart stent implantations,23 spinal-fusions,24 hysterectomies,25 and certain other surgical procedures enhances the risk of complications.26 

Not only does overtreatment demonstrate disregard for scarce resources and for best practices; it also shows indifference toward patients' best interests. By way of example, the Maryland Board of Physicians in 2011 revoked the license of Mark Midei, a Baltimore cardiologist, for the unnecessary and fraudulent implantation of cardiac stents.27 By his own admission, Midei performed about 800 stent operations in 2005 and 1,200 in 2007.28 Such a large and increasing number of stent implantations prompted investigations by a Maryland hospital and a U.S. Senate Committee into Midei's medical practice.29 

Though the Maryland board found Midei guilty of “gross overutilization of health care services,” the decision to revoke Midei's license hinged on his falsification of laboratory tests. “Dr. Midei's willful creation of false percentage numbers for the degree of occlusion of coronary arteries is indefensible and amounts to a deliberate and willful fabrication of medical records,” the board determined.30 The Maryland board's emphasis on falsified tests underlay its determination to revoke Midei's license. Unfortunately, the board's opinion failed to more precisely address the problem of unnecessary care and treatment. Under the circumstances, the Maryland board missed an important opportunity to put physicians on notice that unnecessary surgery alone might call for disciplinary action.

What can the medical profession do, if anything, to discourage unwarranted and profligate spending? More than it is doing now, certain medical ethicists have insisted. “[T]he myth that physicians are innocent bystanders merely watching health care costs zoom out of control cannot be sustained,” Howard Brody has asserted.31 “Physicians cannot afford to ignore the profound logic of the link between care for individual patients and the costs of care,” Christine Cassel and Troyen Brennan have contended.32 

The justification for disciplining doctors who enhance their income at the expense of their patients' well-being seems apparent. Physicians who perform unnecessary tests and procedures violate all four recognized principles of medical ethics — nonmaleficence, beneficence, autonomy, and justice.33 There is no need for ordering these principles, for placing more emphasis on any particular one of them. Efforts to stem overtreatment protect patients from harm, promote the fair distribution of scarce resources, and enhance the profession's standing.

in 2002, the American Board of Internal Medicine (ABIM) Foundation, along with the European Federation of Internal Medicine and the American College of Physicians, issued a global Charter on Medical Professionalism for the twenty-first century.34 The Charter put forth three “fundamental principles” (patient welfare, patient autonomy, and social justice) and a “set of professional responsibilities” to guide physicians' interactions with patients, health care organizations, and society. Overutilization and wasteful spending received prominent attention. “The provision of unnecessary services not only exposes one's patients to avoidable harm and expense but also diminishes the resources available for others,” the Charter's authors stated.

Following issuance of the Charter, several medical specialty societies sought to identify tests and procedures often overused in their respective specializations. After an exhaustive period of review, nine societies in April 2012 issued their “top five” questionable tests and procedures.35 An additional eight specialty societies plan to release their top five in the near future.

The recent pronouncements of the national specialty societies should aid efforts of state medical boards to identify and discipline licensees for gross overutilization, unnecessary treatment, and wasteful spending. Because most physicians today are board certified in at least one specialty area, few doctors lack knowledge of evidence-based standards and guidelines concerning questionable tests and procedures. Those doctors who consistently ignore recognized standards and guidelines, placing their financial interests above their patients' welfare, warrant disciplinary action.

Few boards have the resources, the inclination, or the mandate to pursue licensees for unnecessary care and treatment. “We view ourselves as a catcher's mitt in that we do not seek out infractions, but rather respond to 1,500 reports that come to us each year,” explained one board member. “From my own experience,” another board member stated, certain specialists “are sometimes able to over-utilize various tests and procedures without much consequence or notice because they manage to do so just within the range of acceptable medical practice and, therefore, below the radar of peers, hospital administrators or state regulators.”36 

For these and other reasons, state medical boards face at least two significant barriers to disciplinary action: (1) the asserted need to receive information concerning potential abuse before investigating, and (2) the ability of most offenders to provide some justification, however tenuous, for their treatment decisions. Notwithstanding these obstacles, boards can and should take certain steps to stem overtreatment and, in so doing, meet their obligations to protect the public.

First, boards should signal their intention to discipline egregious offenders, to show that overtreatment is a serious problem and that disciplinary action may be warranted. A good place to start would be for boards to amend their respective state laws or medical practice acts to include a specific ground for “clearly excessive treatment of patients.” The Federation of State Medical Boards should take the lead in this endeavor. The Federation's Model Medical and Osteopathic Act does not include a specific disciplinary ground for overutilization; nor do medical practice acts in more than 60% of states (see Table 1). States that lack a specific ground currently charge offenders under a “catchall” provision, such as unprofessional conduct, substandard care, or fraudulent activity. Such “catchall” provisions are poor substitutes for more targeted laws that would increase awareness of the problem and boards' intent to discipline egregious offenders.

Second, state medical boards and the Federation should issue guidelines or recommendations on excessive care and treatment. In related areas, the Federation has issued guidelines, white papers, or has teamed with others to produce books or tracts on matters such as opioid prescribing.37 The Federation could build on these related efforts by examining, collaborating with, and potentially incorporating the recently-released findings of several national specialty societies under the auspices of the ABIM Foundation and others as previously mentioned.

Few patients are capable of making informed decisions about the efficacy of diagnostic tests and medical procedures. Most patients require their physicians' help and assistance. Because doctors figure prominently in the selection of medical services, they are key to controlling health care costs in a fragmented delivery system. Though state medical boards cannot easily address widespread medical practices that lead to overspending, they can support the efforts of national specialty societies to establish evidence-based standards. Moreover, they can revise, if needed, their respective grounds for disciplinary action to more clearly identify and more easily discipline offending physicians.

The author would like to thank Chelsea Olson for her assistance.