As you’ve read about in my previous posts, the economic climate in the medical profession is hostile. Physicians must justify to insurance companies almost every single thing they do. The treatments and procedures that are approved with no hassle are usually ones that are very cheap or ones where the physician does not make much money. Thus, physicians must force themselves to earn their living through other income streams. Enter “ancillary services.”
In medical speak, ancillary services are services that are part of medical care but not the actual treatment or procedure. For example, if a patient has an injury and needs further evaluation to help decide to have surgery, a diagnostic study such as a CT scan or an MRI may be needed. The surgeon probably will make less doing the surgery than the cost of the actual diagnostic study. How can this be? Well in medicine, technology pays. Insurance companies don’t think that surgical or procedural skills are “advanced technology.”
Thus, as you can imagine, the lucrative segment of the industry known as ancillary services is a huge source of revenue for physicians who invest in these services. These ancillary services include imaging centers, surgical centers, diagnostic labs, dialysis centers, infusion centers, physical therapy and rehabilitation facilities, etc. The list really can go on and on. Some doctors actually make more money off these ancillary investments than they do from their own clinical care of patients!
The era of ancillary services does not come without its own set of moral and ethical challenges for the physician. The physician must always do what is best for the patient. The patient’s interest must come before the financial interests of the physician. The Stark laws against self-referral clearly highlight the point that the government will not allow a physician to get paid for a service or treatment or procedure via a self-referral where the physician has a financial interest. For example, he cannot order an MRI for a patient and send the patient to an MRI center that he owns.
The era of ancillary services clearly indicates that we are at an inflection point in healthcare finance. Perhaps the continued reimbursement difficulty will attract individuals into the field of medicine who are not money driven. Perhaps the era of ancillary services will attract individuals who are interested in the business of medicine. One thing is clear – the era of ancillary services will pose signficant ethical and moral challenges for physicians looking to capitalize on those services to make up for meager clinical reimbursements.