Cherry-picking patients leaves sour taste
■ Is it ethical for physicians to employ health IT to select healthy patients?
Performance-based payment approaches may tempt physicians to use electronic medical records to select healthier patients, a practice known as cherry-picking, so they can meet performance criteria and keep practice costs at a minimum. Is the practice ethical?
Reply: During the past 20 years, cherry-picking by profit-driven health plans and hospitals has alarmed health care policymakers and contributed to rising health care costs. A related practice -- "lemon-dropping" or "dumping" -- is the termination of care for difficult, costly or otherwise unwanted patients.
The spread of pay-for-performance payment raises concern that physicians might emulate these cherry-picking and lemon-dropping behaviors and deny care to those most in need, further driving health care costs upward.
Fee-for-service payment, long the predominant payment method in the U.S., has encouraged excessive focus on diagnosis, documentation of disease and overuse of procedures to generate higher payments. But in the managed care era, capitation -- receiving a fixed amount per person, regardless of services rendered -- encouraged health plans, hospitals and others to cherry-pick and lemon-drop to maximize profits. There is every reason to expect that physicians will face similar temptations as government and private payers adopt capitated and performance-based payment approaches.
The widespread adoption of electronic medical records will provide physicians with powerful new tools for data mining that could assist in selection of profitable patients. Poorly designed pay-for-performance incentives could motivate physicians to end their relationships with "difficult" patients or not accept elderly patients, those with multiple chronic medical problems or those with low health literacy.
Sophisticated cherry-picking by for-profit Medicare HMOs is well-documented. Many Medicare HMOs actively recruit clinical practices and patients in affluent areas, offering healthy seniors free meals and other inducements to switch from traditional Medicare to their private HMO option. Few recruitment events occur in low-income or minority neighborhoods. Similarly, capitated Medicaid managed-care plans have used credit cards, health club memberships and enhanced vision, dental or pharmacy benefits to induce healthy patients to enroll in their health plans and increase plan profits.
Health plans commonly participate in lemon-dropping by designing benefit packages in ways that discourage sicker patients from re-enrolling. A report by the Medicare Payment Advisory Commission found that some Medicare HMOs require large co-payments for kidney dialysis, colorectal cancer drugs and radiation procedures, a practice that leads subscribers who need medical care to disenroll. A study of Medicare enrollees in Florida showed that people who join Medicare HMOs tend to have a history of low medical expenses, and people who have high medical expenses are more likely to unsubscribe.
An HMO in Virginia paid a multimillion-dollar settlement for defrauding a state Medicaid plan by systematically avoiding costly delivery and neonatal care. The HMO was paid a fixed amount per pregnant enrollee, and internal company memos confirmed that the organization intentionally avoided enrolling pregnant women.
Dialysis centers and specialty hospitals also may cherry-pick and lemon-drop to enhance their bottom line, "firing" chronic no-shows, people who arrive late, and patients who do not follow diet and medication instructions. Even for-profit hospices have been shown to select patients with the bottom line in mind.
One study found that, by accepting more dementia patients -- who have substantially longer average hospice stays than cancer patients -- for-profit hospices minimized costs in two ways. First, less frequent turnover meant fewer enrollment costs. Second, dementia patients required fewer home visits by skilled hospice workers than did cancer patients.
New payment incentives to reduce costs may tempt physicians to participate in the same cherry-picking and lemon-dropping activities for which they have disparaged health plans. In the past, physicians have tacitly joined in cherry-picking and lemon-dropping by participating in the schemes of large health care organizations that employ them, by selecting affluent locations for their practices and by terminating relationships with difficult patients. But today, physicians are facing temptation to cherry-pick and lemon-drop at the same time that health information systems are enhancing their capability to select patients.
Lemon-dropping can be conducted easily with a highly functional electronic medical record system that includes registries for patients with chronic diseases. Depending on the details of their latest contracts, physicians could elect to "fire" all patients with certain difficult-to-treat illnesses or discharge patients who did not meet performance goals, thereby augmenting their pay-for-performance ranking.
Federal privacy regulations that let doctors use patient information for internal operations do not specifically prohibit these activities.
Patient selection of this sort is unethical on many levels. First, health plans, hospitals, HMOs and medical groups that employ these practices can be expected to increase both taxpayer and employer-funded health care costs. Second, lemon-dropping disrupts continuity of care and can result in adverse health outcomes, particularly for our most vulnerable citizens. Third, if these practices persist, those who do not engage in them will care for a disproportionate number of sicker, more costly patients, which makes cherry-picking an unfair competitive practice.
Fourth, a central aspect of professionalism is the physician's willingness to put patient interests above self-interest. A perception on society's part that physicians are putting their own interests first by means of these practices undermines public trust in the profession and jeopardizes effective patient care.
Unethical cherry-picking and lemon-dropping can be reduced or prevented in several ways. First, payment approaches that aim to reduce costs or improve quality need to be designed carefully to avoid creating incentives for patient selection. Risk-adjusted and pay-for-improvement payment models, for example, encourage physicians to care for complex and vulnerable patient populations.
Second, insurance reform and health care reorganization can help. The Patient Protection and Affordable Care Act guarantees insurance to those with preexisting conditions and prohibits cancellations of insurance. Accountable care organizations -- collaboratives of doctors, hospitals, nursing homes and others that organize to coordinate patient care and cut costs -- are prohibited under the health system reform law from engaging in risk selection to decrease costs. Because physicians, medical groups and physician-hospital organizations have the opportunity to develop and lead accountable care organizations, it is incumbent on physicians to advocate for ACO rules that encourage population-based care for everyone in the community.
Third, medical organizations are an important source of moral suasion, and position statements by such groups could have a positive effect. American medical organizations should develop position statements on cherry-picking. Carefully designed payment models and contracts, legislation and medical organization position statements can help physicians resist the temptation of forbidden fruit in the age of health IT.
Carson Strong, PhD, professor, Dept. of Medicine, University of Tennessee Health Science Center
Jim Bailey, MD, MPH, professor, Dept. of Medicine, University of Tennessee Health Science Center