Medicare reimbursement changes for bladder biopsies

The American healthcare system is currently in the throes of tremendous turmoil. Politicians and policymakers are constantly reminding us that the United States has the highest healthcare costs in the world, whereas it lags far behind other countries in quality. Now, several plans are being proposed that purport to reduce costs while maintaining or improving quality. The report by Hemani and colleagues in this issue of Cancer illustrates that well intentioned changes in health policy often have unintended consequences and ultimately may result in the exact opposite of what policymakers intended. In 2005, Medicare regulators increased the reimbursement rate for in-office bladder biopsies. The presumed intention of this change was to realize economic efficiencies by incentivizing providers to move this relatively simple procedure from the more expensive inpatient hospital setting to the presumably less expensive outpatient office setting. The study by Hemani et al demonstrates that the new reimbursement policy did result in a considerable increase in the number of outpatient procedures performed. However, the increase was not accompanied by a corresponding drastic decrease in the number of inpatient procedures. In the end, the policy resulted in an increase in the total number of bladder biopsies performed and likely an increase in costs, at least in this single academic practice. At first blush, this unintended effect might be viewed as another example of the negative effects of the current feefor-service system. After all, providers, being economic animals, will strive either consciously or unconsciously to maximize reimbursement. One need only read the recent New Yorker article by Atul Gawande, which President Obama reportedly has made required reading for his healthcare team, to appreciate the perverse incentives of the fee-for-service system. I would like to believe that this is not the case here and that, if it is, then it is a smaller and secondary motivator. Hemani and colleagues, as full-time faculty at a large academic medical center, probably are not incentivized purely on a fee-for-service basis and, to their tremendous credit, have presented their own practice patterns in the peer-reviewed literature for all to see. To this end, I do not believe the findings in their report are caused primarily by self-serving financial motives. Rather, as the authors point out, the change in reimbursement policy likely reduced the threshold for office intervention, resulting in an overall increase in the number of bladder biopsies performed. The real question here is whether or not this unintended consequence is a bad thing. If what is being observed at this single practice is occurring throughout Medicare (and I suspect that it is), then it is likely that the bladder biopsy reimbursement policy change unintentionally resulted in increased costs to the system, because the savings realized by the modest reduction in the number of inpatient procedures performed probably were offset by the added costs of the considerable number of additional outpatient procedures performed. While congress debates healthcare reform, this study tells a cautionary tale of how a change in reimbursement policy can have the exact opposite effect of what was intended and ultimately can result in increased costs. The current healthcare debate, however, is not (nor should it be) all about cost. Quality and access are important aspects that also must be considered. By incentivizing providers to perform bladder biopsies in the clinic, policymakers inadvertently may have increased costs, but they also may have improved access, which is an important and laudable goal.