Scanning for dollars

US docs are getting a cut of imaging profits,
Canadian MDs may be able to follow suit

By Katie Wallace

The Wall Street Journal recently reported that a US-based imaging company tantalized a conference room full of specialists in California with details on how they could make a tidy sum off every MRI they referred to the company's clinics. Doctors pay a flat fee of about $450 (CDN) for every scan they refer to the clinic, and then bill insurance companies the going rate for the procedure, typically at least $850. The physician then pockets the difference, an average of $285 per scan, after paperwork costs.

Could doctors in Canada, where private imaging centres have been operating openly since the early 90s, similarly profit? Yes and no, says Normand Laberge, CEO of the Canadian Association of Radiologists. He says a major distinction between the Canadian and American systems is the issue of self-referral, whereby doctors refer patients to businesses in which they have a financial stake.

HOW IT WORKS STATESIDE
In the US this practice is permitted only if doctors perform the service in their own offices. Despite laws prohibiting compensation for referrals, some US physicians have found legal loopholes to configure referral deals as leases with private clinics.

It's difficult to put a number on how many physicians are cutting these kinds of arrangements. Clinics often protect doctors' identities, while American physicians, in turn, are reluctant to acknowledge they profit off these referrals. Mr Laberge estimates that self-referrals could be responsible for up to 80% of the increase in the number of MRI scans performed in the United States in the last five years.

THE SITUATION HERE
In Canada, however, self-referral is entirely prohibited, effectively safeguarding against these kinds of deals. Instead, says Mr Laberge, what could potentially open the door to these kinds of practices in Canada is the proliferation of non-physician-owned private clinics. While physician-run private clinics are still governed by the rules and codes of medical colleges and associations, non-physician owned clinics are not subject to these professional regulations. "The College of Physicians does not regulate McDonald's," Mr Laberge says. "And a private clinic is just like a McDonald's."

CLINICAL ANARCHY
Mr Laberge says it's unclear how a deal struck with a non-physician owned clinic would be regulated. "What rules apply in that case? The chamber of commerce rules?" he wonders. He feels the easiest way to safeguard against clinics offering financial incentives is to make it illegal for anyone besides physicians to own and operate private clinics to ensure professional rules and codes apply.

Now that private health care has emerged parallel to the public system here in Canada, imaging is not the only sector where physicians profit from private services. At least one clinic in Montreal, for instance, offers female patients a more advanced PAP test that screens for HPV, which patients pay for from their own pockets. Other private labs offer speedy blood tests and other diagnostic procedures at a cost.

Although Quebec, particularly Montreal, is the private health care capital of Canada, the issue affects the entire country. Last summer the Canadian Union of Public Employees (CUPE) released "Innovation Exposed," a report exploring the privatization of the Canadian system, as more provinces opt for some degree of private care, whether in the form of for-profit clinics or private-public partnerships.

But it is important to differentiate between physicians who profit from private medical services and those who accept kickbacks from private clinics for referrals.

STRAIGHT ARROWS
Dr Regan Hennie is physician and patient education coordinator with Canadian Diagnostic Centres, a privately owned company (with some physician shareholders) which operates six imaging and diagnostic clinics in four provinces. These clinics serve both the public and private sectors: some patients are covered by public provincial insurance while others pay for services. Dr Hennie says her company does not offer financial incentives or rebates to doctors to refer patients to its clinics as that would directly violate the colleges' ethical guidelines.

Kelly Eby, communications manager for the College of Physicians and Surgeons of Alberta, says that she's unaware of any complaints about doctors receiving compensation for referrals to private clinics. A spokesperson for Ontario's college likewise reports that this kind of complaint has not been an issue to date.

NOT-SO STRAIGHT ARROWS
That said, a recent story out of Montreal indicates that American-style incentives are, in fact, appearing north of the border. In May, The Montreal Gazette reported that the Quebec College of Physicians issued a statement noting that a number of private laboratories were offering physicians rebates to sell their blood tests to patients. The college warned that accepting this kind of rebate is a breach of the code of ethics and professional independence.