By Simon Peck
I should probably start by introducing myself as I have followed a most unusual career path. I started my medical career working in anaesthetics but for two decades have worked in the insurance industry, where I have developed a specialist expertise in countering healthcare fraud waste and abuse. Along the way I trained as an investigator, initially informally with NEFF (North East Fraud Forum), which is a public-private partnership set up by Northumbria Police, and later taking a formal qualification accredited by the Centre for Counter Fraud Studies at Portsmouth University.
In 2011, quite by chance, I went to see a group of doctors because their billing had escalated precipitously. During the conversation I made a casual remark about the state-of-the-art consulting room and brand new equipment, and the senior partner informed me that he now sent all his patients to a new hospital who had paid for everything – his staff had been taken onto the payroll, the equipment was free and the hospital were even funding an agency to do his billing. I asked him to explain a little more and he immediately started to be evasive.
I got no further, so I left and searched the land registry and confirmed that what I had thought to be an independent consulting room was in fact owned by a private hospital chain.
I tasked my investigators to search the land registry and give me a list of every building the hospital chain owned. Then at 5am the following Saturday, I sent a team of people out with cameras to visit, catalogue and photograph every building on the list with a specific instruction to photograph business signs and any name plates - anything to identify the purpose of the building. To my surprise I was presented with a list of clinics I had previously considered to be independent.
I then identified occupants I felt might speak to me, with appropriate promises of confidentiality. It was not long before I had persuaded a doctor to part with a photocopy of his lease agreement, which clearly showed he had been given the use of the building rent free in return for making 'reasonable endeavours to refer patients to the hospital'.
The lease agreement clearly showed he had been given the use of the building rent free in return for making 'reasonable endeavours to refer patients to the hospital'
Over the next 12 months or so, my team visited doctors and hospitals all over the UK and discovered that the payment of 'incentives' was widespread and almost all private hospital groups operated some schemes, usually targeted at big earners. Included in the schemes we found were:
- Free services, secretarial support, administrative services, billing services and equipment.
- Profit shares where a percentage of hospital bills was paid to the doctor in return for increasing the bills over an agreed target.
- Commissions on pathology tests.
- The most concerning scheme I discovered was where a hospital set up a joint venture with doctors to buy equipment, and made a loan to the joint venture. The doctors then referred patients to the service and billed insurers. The charges were at a level which would repay the loan after a time, making the doctors and hospital joint owners of a new clinic or equipment. Even more worrying, we found some multi-disciplinary teams (MDT) which were gatekeepers for a new technology, where many or all of the MDT had financial interests.
Deeply concerned by what I had seen, I visited the General Medical Council (GMC) – the public body that controls registration of medical practitioners – with a catalogue of evidence. I was astonished to be told that they would not investigate the matter. My evidence was submitted to the Competition and Markets Authority (CMA) who performed their own investigation, agreed with most of our findings and acted to ban the majority of these schemes.(1,2) They also mandated disclosure of COI on hospital websites. The entire report and all the evidence can be accessed on the CMA website. It should be noted clearly however that the ban was because the CMA believed that the schemes were distorting the operation of a free market. The CMA has no remit to consider medical or ethical issues.
I was astonished when the GMC said that they would not investigate the matter. But the Competition and Markets Authority (CMA) did, agreed with most of our findings and acted to ban the majority of these schemes.
Disturbed by the GMC’s refusal to investigate, I also passed a file of evidence to the British Medical Journal, who covered the issue in detail: The truth about cash for referrals.(3) I asked to remain anonymous, however one night, in a low moment at a health conference in Tel Aviv, I also emailed a file of evidence to Grahame Morris MP for Easington who helped me get it in front of the Health Select Committee. Unfortunately, whilst the following hearing was undoubtedly uncomfortable for the GMC, no meaningful change was forthcoming.(4)
Five years on, little has changed. Large sums of money are still paid to doctors. The banned schemes have gone but new transaction types whose effect is transferring money from hospitals to doctors and which are perfectly legal have emerged. For example, advisory contracts which may be worth over £100,000 are awarded. Transparency is rare and disclosures are partial and exceptionally hard to find.
In 2018 The Sunday Times reported that significant fees for psychiatric patient referrals were still being paid.(5)
In 2019, the Centre for Health and the Public Interest (CHPI) released an excellent and well-researched analysis of the situation entitled Pounds for Patients, which documented again the ways in which hospitals find ways to pay doctors and the ongoing lack of transparency. The CHPI noted that the majority of these schemes involve high-value cardiology and oncology services, something which accords with my own experience. I commend this report to anyone interested in this matter.(6)
So does this matter? There is ample evidence that these schemes corrupt judgement at the population level, not just at the margins. In 2011 JAMA published research from the USA showing that the propensity to order cardiac imaging was dramatically increased where a fee could be claimed and further increased where the doctor had an equity stake in the facility.(7) A review of this subject is far too complex for a short article but every study I have seen tells a similar story.
The GMC continues to turn a blind eye to the issue of doctors' conflict of interests. In 2018, the CEO Charlie Massey wrote to the Health Select Committee setting out the reasons why the GMC does not wish to set up a register of interests.(8)
The case for a register of interests is overwhelming. Until a light is shone on these payments we cannot even know the scale of the problem.
This situation cannot continue. The case for a register of interests is overwhelming. I do not believe this is the ultimate goal but it is an essential stepping stone, as until a light is shone on these payments we cannot even know the scale of the problem. In my view it is inappropriate for doctors to covertly accept money from hospitals to whom they refer patients, from drug manufacturers whose products they prescribe or from manufacturers of equipment they recommend to patients. Whilst these payments are invariably 'justified' or sanitised, the true purpose must be obvious to all and if there were any doubt on this matter the ongoing culture of secrecy, defensiveness and silence around these payments speaks volumes.
Ultimately if we do not act, the final casualty will be the reputation of the medical profession itself.
Dr Simon Peck is a doctor who is also an accredited counter-fraud specialist. He works part-time in the insurance industry where he advises a team specialising in investigation of healthcare fraud waste and abuse. All views here are his own.
- https://assets.publishing.service.gov.uk/media/533af065e5274a5660000023/Private_healthcare_main_report.pdf Section 8
- The truth about cash for referrals https://www.bmj.com/content/350/bmj.h396
- http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/health-and-social-care-committee/2015-accountability-hearing-with-the-general-medical-council/oral/17274.html question 98 onwards
- Cash for patients – doctors take huge kickbacks in rehab scandal https://www.thetimes.co.uk/article/cash-for-patients-doctors-take-huge-kickbacks-in-rehab-scandal-8fsttqscd
- Shah BR, Cowper PA, O’Brien SM, et al. Association Between Physician Billing and Cardiac Stress Testing Patterns Following Coronary Revascularization. JAMA. 2011;306(18):1993–2000. doi:10.1001/jama.2011.1604