Sham peer review or malicious peer review is a name given to the alleged abuse of a medical peer review process to punish a doctor for personal or other non-medical reasons. The American Medical Association conducted an investigation of medical peer review in 2007 and concluded that while it is easy to allege misconduct, proven
cases of malicious peer review are rare.
Since his own experience with sham peer review, Dr. Umali has found that the process is a lot less rare than the article indicates. Sham peer review, which perverts the medical peer review process, is just one of fatal flaws in the system that he believes can be solved.
Health savings accounts have been around through the U.S. Treasury since 2003.
Health Savings Accounts (HSAs) were created by the Medicare bill signed by President Bush on December 8, 2003 and are designed to help individuals save for future qualified medical and retiree health expenses on a tax-free basis.
They're generally a savings account used to pay for individual health insurance. In fact, though, as the explanation from Treasury indicates, they can be used for all sorts of health care related expenses. What if health savings accounts were used to create an alternate health care system that fixed the waste, fraud and abuse with the current system?
That's the basic premise for the idea by Dr. Umali. He'd like to offer anyone the opportunity to create a government sponsored health savings account and then use that health savings account to invest in a health care co op. Think of it as a credit union for health care. In a credit union, the depositors are also the owners. A mutual company works in much the same way. Dr. Umali wants to create a system in which every participant also owns a part of the entity. By doing so, that limits, if not eliminates entirely, the waste, fraud and abuse. After all, if you own all parts of the system, you are only committing fraud on yourself.
Dr. Umali isn't merely talking about owning a hospital or two, but an entire chain capable of providing health care: the health insurance company, the medical malpractice company, the hospitals, the drug companies, etc. It will all be part of the co op.
This co op won't engage in the sort of practices that have plagued the current health care system. For instance, when a lay person thinks of tort reform, they think of limiting damages and instituting a loser pays system. When doctors think about tort reform, it's much more sophisticated than that.
Let's start with HCQIA (the Health Care Quality Improvement Act). This act laid out the standards for medical peer review. Unfortunately, the standards were so vague that it's unclear who the "peers" are in medical peer review under HCQIA. Often, unqualified persons are making judgments about medical decisions. The vague nature of the law also allow for abuse which winds up causing sham peer review.
In this co op, that would no longer happen. Only general surgeons would conduct peer reviews for other general surgeons. In other words, only true medical peers would conduct medical peer review. The process of medical peer review used to be one in which medical professionals would analyze their decisions with each other as a way to learn. Now, it's a process dreaded by many doctors. That's because it's been perverted. That would no longer happen under this system.
This co op would also eventually challenge some common, but fatally flawed, conventional wisdoms. The first is the conventional wisdom that medical licensing is something that should be left in the hands of the states. Currently, each of the fifty states have a medical board. About half are horribly corrupt. All are political appointees. Often, members of the state's medical board aren't medical professionals. For instance, in the state of California, the mayor of Rolling Hills is on the California medical board. In the state of Kansas, the law mandates that two non doctors be on the Kansas medical board. Why would a politcally appointed non doctor be the right person to decide if a doctor should maintain a license in a given state? Is it any wonder that this process far too often has been corrupted?
In fact, there's nothing that says that state's have a monopoly on medical licensure. Before the 1920's, there was no such thing as state medical boards. Doctors went without getting licensure from their states. The industry somehow survived without it. In the state of California, the language is very clear, "the state should provide licensure". There's nothing that mandates that the state be the only body.
So, Dr. Umali believes that their monopoly could be challenged on two levels 1)the law doesn't give them monopoly power and 2)their licensure monopoly makes them an illegal trust. So, while this co op would start by following the medical licensure laws but it's goal would be to challenge them. Along with medical peer review, the corruption of the medical licensure process is another major tort reform that most doctors have been desperate to see. (I've written plenty about the corruption in the Texas Medical Board)
Medicaid is yet another program full of waste that could be administered in this co op with efficiency and it's efficient administration could actually wind up taking many people off the Medicaid rolls. First, currently, the Federal government shares the costs with individual states. So, money is split up between the two entities. As it travels through several bureaucracies, the waste created means that more than 50% of every dollar spent in Medicare is spent on bureaucracy and administration.
This co op would do it better in the opinion of Dr. Umali. If the money went directly from the federal government to the co op and put into a health savings account, much of the waste would be cut out. Because the co op would have a streamlined health care system of its own, there wouldn't be the red tape between the hospitals, the states, and insurers. Furthermore, with the streamlined process soon enough the patients would have enough built up in their own health savings accounts that they wouldn't need Medicaid.
The idea is predicated on two truths. First, if you own, you have a stake and everything runs better. Second, doctors know how not only to practice medicine best but how to conduct the business of medicine best. The business side has been hijacked by insurers, lawyers, and politicians. This idea would take all those folks out and give the power back where it belongs into the hands of the doctors themselves.