Peter Bach

Do We “Waste” Money on Terminal Patients?

VTR Date: April 21, 2012

Richard Heffner speaks with Dr. Peter Bach of Memorial Sloan-Kettering Cancer Center.


GUEST: Dr. Peter B. Bach
AIR DATE: 04/21/2012
VTR: 01/19/2012

I’m Richard Heffner, your host on The Open Mind … have been for most of the years since I began the program in 1956.

And in all this time I’ve counted among my greatest blessings the many medical doctors who have joined me in conversation at this table: Lewis Thomas, Nathan Kline, Jonas Salk, Mathilde Krim, Robert Michels, Benjamin Spock, Harold Varmus, Kathleen Foley, Herbert Pardes, Hyman Spotnitz, Fred Plum, Richard Cohen, Paul Nurse, Oliver Sachs among many, many others.

And all, it seems to me, have had in common an extraordinary ability to communicate to the rest of us, to the lay public … a skill unmatched in importance
as medical knowledge expands beyond our wildest imaginings, but as public understanding of the stuff we’re made of seems left so far behind, and difficult value judgments must ever more often be made to bridge the gap.

Indeed, that’s precisely why I invited Dr. Peter Bach, Director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center here in New York to join me today.

For I’m grateful to be now what the Cancer Center calls one of its “Survivors”… though, so to speak, I met Dr. Bach for the first time not at the hospital, but rather only a few weeks ago in the opinion pages of the New York Times where he had written a quite provocative piece about once helping save a man seemingly in the last hours of his life…but who three weeks later walked happily out of the hospital with his family.

Dr. Bach further writes: “No one would call what happened over those weeks a waste of health care dollars. But if we change the ending of his story, if my patient had died despite our efforts, many…would have called it just that … [for] the idea that we waste money on terminal patients has caught on”.

And I would today like to ask my guest first to pursue further that idea, which I gather he finds quite inappropriate … the idea that we waste money on terminal patients. Dr. Bach?

BACH: Well, thank you for that very flattering introduction and I’m very pleased to be here.

I wrote the essay to try and illustrate what I thought was an intellectual fallacy in the reasoning around money being wasted on patients because they have died. It presupposes and we spend a lot of money on people who are, for example, in the last year of life.

It’s about 15% of every healthcare dollar goes to people in their last year of life. About 25% of Medicare dollars go to people who die in a particular year.

But the fact that somebody dies doesn’t mean that death was known as a near certainty in the near future when the treatments are delivered.

Rather, patients get sick … when they get sick they need more resources … we spend more money and also when they get sick … they’re more likely to die.

And so there’s a sort of mathematical thing going on where healthcare dollars and healthcare spending will always be concentrated on people who’ve died, as well as concentrated on those who are very sick, who were, if you will … saved … or who’s health was improved, or condition was salvaged by … as a result of that spending.

And so the fallacy I was getting after was a highly technical one but cuts to the core of how we think about or conceive of healthcare.

The fallacy, on a technical basis is purely mathematical. Of course we spend a lot on people who die … people who are at risk of dying are also very sick and, of course, we spend our money there.

On that point, you know, many people look at how we … the healthcare system is distributed and say, “Well, why don’t we spend more on prevention?” … you know, “We shouldn’t spend so much money on ICUs and really very expensive treatments.”

And they may be right that the ratio isn’t ideal, maybe we should spend a little more on prevention. In fact in some areas, we fall pretty short. You know we could screen more people for colon cancer, for example. We could give more kids the flu … more people the flu vaccine, as well.

But it’s not the case that by spending more on prevention we would somehow reduce the spending on patients who become seriously ill. That’s what happens, often, before people die.

So from a mathematical perspective even if we loaded up more spending on prevention, it really wouldn’t take away the spending on people who are very ill.

You know we wouldn’t move that number, 25 cents of every Medicare dollar very much. In fact that number … has … has been within on or two cents, if you will, for the last 30 years in Medicare, because that’s just how healthcare works.

Another problem is conceptual. It’s easy to, if you will, lament money that’s thrown out the door, goes down the drain, spent on a patient who doesn’t walk out of the hospital, but instead dies.

But the very purpose of what we do and our greatest advances in medicine are actually around the objective of improving the quality and the longevity of patients who are at high risk of death by virtue of being ill. They have multiple conditions, multiple problems and we’ve gotten incrementally better at taking care of them and incrementally better at improving their outcomes.

I’m not saying all we do is a panacea, I’m not saying that all patients … and I can circle back … that is, all patients should get all therapies we have, if you will, in all interventions. But the very purpose of what we do and the key frontier of our advances has always been in taking care of people who are sick.

HEFFNER: Well, how do you explain then the, the popularity or acceptance of this idea?

BACH: Well, it, it’s a … it’s a conceptual defect, if you will. It’s the … and it comes out even in the simple language that if … you probably didn’t notice, but I’m very sensitized to it … the subtle distinction between referring to a patient who is in their last year of life because they died on some day and then therefore the 365 days before that were their last year.

And our, if you will, the human concept that somebody is terminally ill, which is a different thing … a subset, if you will … patients who are … you know who have metastatic cancer, who are beyond treatments that are effective and you, are dying, in the, in the sense that we all mean it. That we sort of know, we call the families, we, we sort of know that they’re, if you will, at death’s door. That can be a clinical judgment, it’s also a spiritual one. But that group of patients, is like I said, a subset … maybe a pretty small one.

Of all of those patients who happen to die in a particular year … who, some of, but not all of, went through a period where they were, you know, technically, you know, terminally ill … kind of obvious to everyone. But a whole raft of patients, who were like the man I talk about …


BACH: … who, you know, I … it was a memorable moment, the details of the story … it is … I think … I said it was 20 years, I think it was 18 years ago … I remember it like it was this morning … he was going to die. We did something, he didn’t die. That doesn’t make us miracle workers … any doctor who reads that essay knows the diagnosis from the first sentence … and knows who you would call.

And no doctor on this planet, I think, would ever stand aside and say, “Well, he could die, so I’m not going to do anything.”

But the, the issue of … you know, the fact that a patient dies means that, you know, some period of time before … a year, for example, if you’re talking about the last year of life … it was totally obvious, the writing was on the wall … or whatever the right metaphor is … you know that just doesn’t marry with what we do every day.

HEFFNER: You know, that’s why I was so interested, in particular … when shortly after your piece appeared in the Times … a month afterward … another piece appeared which the Times people titled “Interactive Tools to Assess the Likelihood of Death” … as if there are certainties about this and if you can be fairly certain that the signs are this person is going to die shortly, then obviously the economic answer is “don’t waste our resources” which are limited on her or on him. Very different approach than your own.

BACH: Ahmm … I, I don’t … I don’t want to pin too much of an expectation of how people would respond to these tools or use them on the, on the Times … the editors who wrote that title. You know, this is a very … this is a gray area conceptually. I was writing about something …

HEFFNER: It’s a black area (laugh) …

BACH: No, I don’t think so. No I was actually making a black and white distinction … right. You can’t think about spending prior to death as spending on terminally ill patients because that’s not how the world works. Some of them are terminally ill for some period of time, but not every person who dies for 365 days exactly … was known to be terminally ill and every dollar was wasted on them.

That was the simple, black and white point I was … but you know, we as doctors, we as human beings, we as patients … do confront the need to understand what the array of possibilities are facing us and our loved ones in the near term when serious illness arises.

And quantitative estimates such as these tools produce provide some usefulness, some utility, if you will.

Some patients really do want to kind of know their odds. Around … and that effects their decision making. They want to know their odds before they’re screened for a particular disease whether or not it will really help them.

We use these tools in completely different settings … like should a person go on a drug to lower their cholesterol? And that answer, when properly done is influenced by the probabilities, using tools, that that person will have a heart attack. No one’s probability is either zero or 100 and so we’re making those sorts of judgment calls, hopefully informed by data.

The mistake and the challenge is, you know, exactly what I’ve just alluded to … no tool says you’re going to live forever, or if does, it’s broken … and no tool will say your chance of death is 100% in the next 30 days or 60 days or something like that. It will just sort of place patients into rough buckets.

HEFFNER: Well, let’s not kid ourselves, this becomes important today because we’re spending so much time talking about the costs of medicine. How are we going to approach that concern?

BACH: The … I … I …

HEFFNER: Small question.

BACH: Small question, I’m glad we have a few minutes to cover it.


BACH: And, for sure, I allude to that in, in the article and it’s the subtext of the whole thing that, you know, policymakers think this is a source of savings.

It, it probably is. I think most policy experts who’ve looked at the economics of healthcare … have pointed to a couple of things. And it’s not about the spending in the last, you know, few weeks of life …

HEFFNER: It’s about the spending.

BACH: It’s about spending …. which is about both the prices and the number of services we have and provide to patients, so most policy analysts will look at healthcare spending and say, “You know, the first challenge we have is actually that we spend too much per unit of healthcare”.

Because we have a highly dysfunctional marketplace, if you want to call it a marketplace. We have producers of, you know, drugs and then devices of pushing through very high prices in a sort of monopolistic way and we have a payment system, you know, Medicare, the government or whatever, which just sort of takes those prices and those same manufacturers will sell those same goods, exactly the same, the same packaging, at half the price to the rest of the developed world.

And, so … nobody can look at our spending and say “Well we would … maybe it would be better off if we paid kind of the same price as the rest of the developed world”. You know, and just look at things like spending at the end of life. Right. Clearly one piece is prices.

Another is … you know … there are certain services … the quantity of which we use, you know, blows away other people and, and it doesn’t make a lot of sense … particularly, you know, imagining services and things like that.

We just use a lot of them, they’re sort of completely chaotic in how they’re used … you know … a patient can go to one hospital and get a CAT scan and they can go across the street and because the CAT scan won’t move either digitally or physically … the CAT scan is repeated. And patients get … you know those … as we have more accessibility of those machines, and then they sit there incurring these fixed costs … the machines get used more and more for, if you will, a lower and lower bar indication.

So, when I started my medical training … you know we had a CAT scan that was accessible … we’d have to call up and then we’d had to schedule a time and then maybe the patient would get it in the next day, or something like that. And then we’d all march down there to see the CAT scan … it was a big deal, you know, and I’m not that old.

Nowadays, you know, they are widely available to every doctor, certainly in New York City and in any populated place. And so they get used more. And so there’s both … a price … the cost of doing a CAT scan in the US is much higher than it is in most of the developed world and the number of things, like CAT scans, that we do … or MRIs … is higher, too.

Every piece of new technology we can get our hands on, we adopt rapidly. And, you know, the barriers to doing that … threshold, for instance, … is it really better … does it even make the patient feel better … are sort of non-existent.

HEFFNER: You know as I go through many of the things you’ve written, whether for The New York Times or the Wall Street Journal, or wherever … you’re trying to reach the public. Why? What do you want to have happen?

BACH: Oh, that’s a great question. Thank you. I have no idea … it’s … you know I woke up one day and I thought, you know, we had had a piece …the first piece I wrote for the Wall Street Journal, which I think I saw in front of you.

We’d had a piece in a medical journal where we talked about the chaos in the Medicare program. And that policymakers were looking at Medicare and saying “Well, you know what we need to do to solve one big piece of the problem is … we need to make doctors responsible for and also credited for providing high quality care to their patients”.

And a colleague of mine and I backed up and, you know, we’re skeptical academics … that’s what we do, we tested the most basic assumption in there which was … do Medicare patients actually have their doctor … have doctors?

And again, you know, it was a methodologic … it was a mathematical question, right? We tried to marry … you know, we can look in claims data and we can find unique patients, we can find unique doctors. And we tried to figure out, were they interacting in this way that was like a marriage … like every time the patient went to a doctor …that went to that doctor? … or was it like … if you will … a college mixer … right … where everyone’s interacting with everyone, if you will.

And it was completely the latter. You know, we found patients and we can figure out what’s wrong with them from the diagnosis codes and claims and they were bouncing all over the place … in a sort of Brownian motion … right … the average patient on Medicare was seeing seven different doctors in a year. The next year they’d see seven doctors …

HEFFNER: Different ones.

BACH: Yeah … two of them might overlap. As they got sicker, they actually got into, if you will, bigger mixers. Right? Not … they didn’t get tighter relationships with doctors … you know, handle their complex problems, coordinate them … things like that … what you’d want … right … it was the exact opposite. It just became more chaotic.


BACH: Well, I don’t really know. There’s certainly no incentives. Or at the time there were no incentives at all for doctors and patients to form these lasting and bonding relationships.

In fact, the payment system encouraged patients strongly, encouraged doctors, if you will … to take on new patients, because Medicare used to have fees where, if I saw a patient … if you came to see me … and you had a certain level of complexity, I can bill Medicare something.

But if you came to see me as a new patient I’d never seen with the exact same problems, I actually got to bill more. So I was highly incentivized, if you will, to find new patients as are, were, my colleagues.

Those problems, that one defect has gone away. But I, I don’t want to blame all of this on that problem. It’s just … you know, this is if you will … a marketplace.

I don’t want to speak harshly of patients … I love patient care, I’m proud of the fact that I’m a doctor. But, you know, from an economic perspective, patients are revenue generating assets and move around. And so, doctors try to draw them in. You only have to open up the New York Times Sunday magazine … another reference to the Times …


BACH: And see the ads for the doctors and clinics and the services in the hospitals and radiology centers to know that somebody is spending advertising dollars to draw in something very important to them for their business. And in this case it’s patients.

HEFFNER: Question.

BACH: MmmHmm.

HEFFNER: Remedy …question mark?

BACH: (Laugh) Yeah, highly technical kinds of things. Right. So Medicare and private insurers are trying build structures where patients will more naturally sort of localize. Accountable care organizations, patient center medical homes, those are two of the technical kind of details that are in the, the healthcare law.


BACH: But those are both things that will create both incentives and penalties, in a way, for doctors and patients to become more coherent … more like a marriage, less like a mixer.

You know quality measures are another way to get there. But you have to understand that, you know, if, IF you look at the sort of politics around healthcare … again, big issue … one of the third rails … I guess you can only have one third rail, but a serious issue … a polarizing point, if you will … is anything you do that limits patient’s choice … and patient choice is “You want to see me? You can see me. You don’t like me, you can go see another doctor” … right. And anything that you do … if you will drive patients and doctors more closely together … if it’s a structural thing, you know, it cramps down a little bit on the ability of patients to go see somebody else. And …

HEFFNER: So it’s choice … again.

BACH: It’s …

HEFFNER: The political slogan.

BACH: I mean … in this case … it’s a different dimension of choice, but sure. I mean, I think, you know, we’re a consumer nation … we want to be able to buy whatever TV we want and see whatever doctor we want and I both understand that both as a doctor and as a patient.

In fact, what we have wrought … through having, you know, any willing provider rules and things like that … all I have to do … and I wrote about it in one piece … all I have to do to be a Medicare doctor is fill out a two page form and fax in my license. And I can see Medicare patients. And I don’t have to see them a second times. I mean, it’s just … we’ve created a lack of structure if you will.

HEFFNER: What … what do you want to see happen? I’m not even asking you to guess what’s going to happen, what do you want to see happen to medicine. And we’re talking about now the, the economics of medicine, within the framework of your concern for human life.

BACH: Hmm, I … you know there’s many different answers. The first is that to, to get to anywhere we need to get we’re essentially going to need a generational change, I think in the work force and in the structure of healthcare delivery. And that’s fine. That’s part of … part and parcel of what we’re doing. We, we have doctors, you know, of my generation … we can barely figure out how to turn on a computer … I being one of them.

We’re going to need the adoption of health information technology and interactivity that is going to take a generation that seems to twitter iPhones. Another is that …

HEFFNER: Excuse me, do you think that’s been a stumbling block?

BACH: Oh, absolutely, absolutely. You know the joke is always that, you know, when we gave doctors computers the first time around the only thing they ever figured out how to do was check their stocks.

And so it’s, it’s difficult. And the IT problem, the software problems are very substantial. And anyone who doesn’t appreciate that … the whole way that the work flows and the data flows and the confidentiality … these are huge stumbling blocks to having good interactivity.

Another thing is that, you know, it … the, the conflict between Medicare as a … medicine as a caring profession and medicine as a business is just so profound that it … my well meaning colleagues … I … we … if every time you have think about what we do in terms of dollars and cents and bottom line, it interferes with contracting, it drives up prices, it causes all sorts of crazy things to happen like doctors have to sign “non-compete” so they can’t do their own business and so that other people can charge higher prices. Competition we have between hospitals that are across the street from each other … that keeping them from being able to share CAT scans, if you will.

Ah, that it, it’s just not working. To have competition on the provider side. I think the competition in other spaces … if we had better movement on prices … on the manufacturing side, the pharmaceutical side … there’s tremendous potential for that … as long as we get prices to move the way they should based on efficacy and things like that as opposed to, to some of the things we have now which are sort of artificial monopologies.

But you know, those two … those are two really important things. I, I hold out hope that the new generation of doctors is going to go into an environment where some of their motives will be different … but just the environment to make a lot of money by kind of going out on your own and trying to carve out your own niche and protecting your market … it’s just that you’re not going to be able to get rich doing it anymore.

HEFFNER: Have you seen any indication that a new generation of would be physicians want to work in that kind of framework?

BACH: Ah, the two strongest indications are … you know, when you do polls of medical students and you talk to residents… systematically as well as sort of ad hoc … you know they’re not interested in working 100 hours a week in a two person practice … so that they can capture all the revenue from the weekend visits in the hospital.

The other is the move toward “hospitalists”. So doctors coming out of their training now … when I came out of training, it wasn’t an option … but it would have appealed at the time. Are moving more and more toward professions where they can be salaried, employed by a hospital. And essentially do medicine as shift work.

And that’s not … in this case that’s not a bad thing. I mean pilots do shift work, right, and they perform at a very high level and they don’t … you know they take home the same paycheck … these hospitalists … every single week. You know they don’t get paid “fee for service”. And I think those are promising shifts, suggest to me that a new generation of doctors could, you know, be paid very comfortably …

HEFFNER: In the two minutes we have left, I need to ask you, doesn’t that conflict with your … ah … what I thought was your desire to see a closer relationship, not when you look at the statistics … there have been seven doctors for this one patient in the last year. But perhaps one or two. Doesn’t that hospitalist approach fly in the face …

BACH: I’m not saying … I wasn’t saying it necessarily solved all the problems, you asked me if I saw a trend towards a different workforce structure …

HEFFNER: Fair retort.

BACH: And I do. I, I think … it’s not clear yet what’s going to happen … whether the hospitalist structure works. It’s sort of … it probably does because care is shifting out of the hospital.

HEFFNER: By the way, what is a hospitalist, so that I’m sure …

BACH: It’s, it’s a doctor kind of like me, who, you know, just works in the hospital … the patient comes in the hospital, they take of them … when the patient leaves, they’re no longer their doctor. And the doctor on the outside communicates, if you will, remotely. Maybe they come in for, if you will, a social visit, but they’re not in charge of the care for the patients in the hospital.

HEFFNER: God help us, I think, when you say that.

BACH: Ah, the evidence suggests that outcomes are better and length of stay is shorter and costs are lower and the patient satisfaction is higher. So maybe it is working. But …

HEFFNER: Patient satisfaction is higher?

BACH: Yeah, it kinda makes sense. Right. It’s, you know, the environments are increasingly different, the hospital where you take care of very, very sick patients and the outpatient environment where there’s less time and there’s sort of a … you know, less ability to deal with, you know, a lot of problems simultaneously. So, you know, some of us are very comfortable in the hospital, and that’s where I work … I only see in-patients and that, that works for me, if you will. And then the outpatient has just a different dynamic.

HEFFNER: Dr. Bach, you say time is a problem. Unfortunately, time is a problem here too, we’ve run out of it. But I do want to thank you so much for joining me today and get you to promise to come back, because obviously (laugh) we haven’t exhausted the solutions to the problems that you begin by raising in this wonderful article. And in all the other things you write. Thank you for doing so.

BACH: Thank you very much.

HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time. Meanwhile, as an old friend used to say, “Good night and good luck.”

And do visit the Open Mind website at

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.