It’s a pretty universal rule: Incentivize something by paying money and you are guaranteed to get more of it.
Medical device makers have bankrolled a cottage industry of doctors and clinics that perform artery-clearing procedures that can lead to amputations.
With the financial backing of medical device manufacturers, a booming cottage industry that peddles risky artery-opening procedures to millions of Americans — enriching doctors and device companies and sometimes costing patients their limbs.
The industry targets the roughly 12 million Americans with peripheral artery disease, in which plaque, a sticky slurry of fat, calcium and other materials, accumulates in the arteries of the legs. For a tiny portion of patients, the plaque can choke off blood flow, leading to amputations or death…
Some doctors insert metal stents or nylon balloons to push plaque to the sides of arteries. Others perform atherectomies, in which a wire armed with a tiny blade or laser is deployed inside arteries to blast away plaque. Rigorous medical research has found that atherectomies are especially risky: Patients with peripheral artery disease who undergo the procedures are more likely to have amputations than those who do not…
The volume of these vascular procedures has been surging. The use of atherectomies, in particular, has soared — by one measure, more than doubling in the past decade.
There are two reasons. First, the government changed how it pays doctors for these procedures. In 2008, Medicare created incentives for doctors to perform all sorts of procedures outside of hospitals, part of an effort to curb medical costs. A few years later, it began paying doctors for outpatient atherectomies, transforming the procedure into a surefire moneymaker. Doctors rushed to capitalize on the opportunity by opening their own outpatient clinics, where by 2021 they were billing $10,000 or more per atherectomy.
The second reason: Companies that make equipment for vascular procedures pumped resources into a fledgling field of medicine to build a lucrative market…
Medicare’s decision to reimburse doctors for procedures performed outside hospitals led to a proliferation of outpatient clinics specializing in everything from orthopedics to dermatology.
The policy also motivated doctors to perform more procedures, in part because private insurers tend to follow the federal agency’s lead…[end quote]
From Medicare’s standpoint, it makes sense to encourage outpatient instead of expensive inpatient treatments. Doctors like this arrangement because they pocket the entire fee instead of splitting it with a hospital.
Unfortunately, the FDA does not regulate the safety and effectiveness of medical devices closely. To get approval, a new device only needs to be “substantially similar” to an already approved device.
A wide body of scientific research has found that for about 90 percent of people with peripheral artery disease — including those who experience the most common symptom, pain while walking, or have no symptoms — the recommended treatments are blood-thinning medications and lifestyle changes like getting more exercise or quitting smoking. But the FDA doesn’t effectively track doctors who recommend profitable procedures to patients who don’t need them. The clinics are not subject to the same safety regulations as hospitals.
The device manufacturers lend money to the clinics to buy the machinery. Of course they later sell the consumable devices.
This is a long and sickening article.
As investors, we can buy stock in medical device manufacturers.
As potential patients, we must be diligent about researching any procedure recommended to us by a doctor.