Early Tuesday, I caught half a headline about drugs being wasted at the expense of Medicare and to the benefit of some dialysis company. A few hours later I saw the first caustic tweets:
|Just some of the angry tweets|
Then I started getting direct messages asking for my thoughts. Recently, Davita has been getting more than its share of bad press recently and this seemed like more of the same. The facts of the news story, as far as I can tell, are as follows
- A former medical director and nurse brought a whistle blower suit against Davita
- They accuse Davita of using large vials to administer IV drugs during dialysis. The large vials resulted in excess medication being wasted
- Medicare pays for the entire vial regardless of how much is wasted
- The Justice department investigated this claim for more than two years and decided not to join the lawsuit
Its clear to me that retail pharmacy system was not the system we wanted. The laws need to change and you know what? This system is no longer the law. Bundling began earlier this year and removes these perverted incentives in order to better align provider and patient goals. In response to the new incentives you know what happened? The vials became right sized and Epo use plummeted. It’s too early to see how bundling effects patient outcomes but Davita and the other Large Dialysis Organizations are responding to the new incentives.
The lesson here is that incentives drive medical decision making. Incentives need to be implemented thoughtfully because small, seemingly minor holes can be blown wide open and introduce major distortions in the delivery of care. In terms of this whistle blower case, I think we shouldn’t dwell on the cows leaving the old barn that has been replaced by one with automatic and secure doors. The old reimbursement system was broken and has been fixed (or at least changed) and I don’t think there is much to be gained by dwelling on the previous system’s inefficiencies and errors.
- Davita administered and wasted dialysis drugs in a way that is uncomfortable, and inefficient but legal.
- The Government realized the incentives were not aligned with better outcomes and changed the incentives
- Davita and the other large dialysis organizations have changed their purchasing and administration procedures in response to the new incentives
- A couple of former employees want to sue Davita for its legal, but opportunistic, drug handling behavior under the old incentives