A Dog-Eat-Dog Business, Part 5

I was attending a guest at Le Mondrian when there was a knock. The guest was not dressed, so I opened the door to find myself eye-to-eye with another doctor. I recognized him as one of the new concierge physicians eager to serve hotels, including mine.

Hotels occasionally summon a second doctor when the first is slow arriving. The sight of this doctor meant that Le Mondrian had called him first, unsettling news.

“Looks like a communications slip-up,” he said cheerfully. “It’s nobody’s fault,” he added. “But it’s only fair, since we both made the trip, that we split the fee.”

I closed the door in his face and went back to work. When I returned to the lobby, the concierge apologized for the mix up, blaming the impatient guest.

She handed me an envelope. A few luxury hotels prefer paying me directly and adding it to the guest’s bill. When I counted the money later, I saw it was too little. She had given half to the other doctor. If she hadn’t, I realized, she wouldn’t have received her referral fee.

The Free Market Strikes Again!

I spend less than $1,000 a year for supplies, so giving them out gratis is no sacrifice. Two or three times a year, I place an order at a pharmaceutical web site. It’s easy, but sometimes I get a jolt.  

I hand out doxycycline, an old antibiotic and the recommended treatment for the most common pneumonia and the most common sexually transmitted disease. In 2012 I paid $50 for a bottle of five hundred. That’s twenty-five treatments which works out to $2.00 for each. When I ran low in 2014 I decided to reorder. Checking the web revealed that five hundred seemed to cost $1,655. That couldn’t be right, so I looked around, but it wasn’t a typo. So I ordered azithromycin, effective and about $4.00 per treatment.

This happens regularly. Remember penicillin? You may think it’s obsolete, but it remains a superb antibiotic and the best treatment for common infections from strep throat to syphilis. Twenty years ago it was as cheap as aspirin. I could buy a thousand for $30. Now the price is $130 and rising.

Here’s what happens. As a drug gets older and older, it gets cheaper and cheaper. But doctors like newer drugs. Everyone (you included) believes they are immune to advertising, but you’re not, and doctors are no different.

It’s a good rule that any drug in an ad is wildly expensive and not superior. Look at the ad: if it doesn’t say the drug is the best, it isn’t. A few years ago Avelox or Levoquin would cure your pneumonia as well as doxycycline at forty times the cost. Doxycycline at $1655 a bottle still costs less but not by as much.

As doctors incline toward a new drug, they prescribe the older one less. Pharmacies buy less. Pharmaceutical companies stop making it. Eventually the remaining companies notice the absence of competition, and the free market works its magic.   

Cheating Medicare

Hearing my fee, the guest announced that he was on Medicare. I explained that I am not a Medicare doctor, so he would have to pay me up front. Unlike most elderly callers, he preferred another source of care, so I gave directions to a local clinic.

Medicare pays less than the going rate for all medical services. I don’t know any hotel doctor who accepts it. Among the ninety percent of office physicians who bill Medicare, many work hard to tack on extra charges for tests and procedures and length-of-visit to compensate for the low reimbursement. This is cheating, but doctors routinely cheat Medicare. After all, they point out, Medicare cheats them.

Most doctors are conservative, so they blame Medicare’s behavior on government bureaucrats. Being liberal, I blame society. The U.S. is a democracy, and most Americans don’t want to pay enough taxes to finance Medicare adequately. No elected representative, Republican or Democrat, would dream of forcing them.

As a result, a Medicare bureaucrat behaves like any intelligent person required to pay bills without enough money. He quibbles, quarrels, delays, discovers errors in the invoice, makes partial payments and sometimes no payment at all. This infuriates doctors but allows the Medicare budget to last out the year. Paying bills promptly would exhaust the money early, infuriating the bureaucrat’s boss. 

A Dog-Eat-Dog Business, Part 4

Danielle, chief concierge of the Ritz-Carlton, calls when her allergies are acting up, but this wasn’t the reason. It was an awkward situation, she explained, but she hoped I’d understand. A guest has complained, I thought. I racked my brain to think who it might be.

If it were up to her, she added, I would be the Ritz-Carlton’s doctor no matter what. Unfortunately, other concierges were putting pressure on her. Another hotel doctor had approached, offering thirty dollars for every referral. She had brushed him off, but her colleagues objected. They reminded her that vendors who want a hotel’s business (limousine services, tours, florists, masseurs) routinely tip the concierges. Why should doctors be exempt?

Here’s a suggestion, she said. Why didn’t I simply match his offer?

I told her that I’m happy to provide free care to hotel staff, but it’s unethical for a doctor to pay for a referral. It’s also illegal. No problem, she assured me. I would still be the Ritz-Carlton’s doctor.

Danielle might continue to call, but I’m less certain about her colleagues.

This exchange reminded me that I hadn’t written the California Medical Board in a few years, so I sent off another letter complaining about other hotel doctors paying referral fees. I’ve sent several. The board is legally obligated to respond to every complaint, and it duly responded, assuring me that it was aware of the problem.

It has never taken action, probably because the Medical Board gives priority to protecting patients from doctors. It shows less interest in protecting doctors from each other.