Authentic Medicine Moment #3: Doctors Ordering More MRIs When They Own MRIs

Would love to hear your thoughts about this.


Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  5 comments for “Authentic Medicine Moment #3: Doctors Ordering More MRIs When They Own MRIs

  1. December 20, 2011 at 2:11 am

    A friend of mine(cough…cough) has first hand knowledge of an MD who had a partnership in an MRI facility. This friend(cough…) can’t say with any certainty whether or not said doctor’s associates(aka buddies) ordered unnecessary scans, but is certain that their patients were purposely steered towards his facility. Of course this sort of stuff goes on with regularity, but it’s very difficult to stop with the foxes in the chicken coup, dressed as sheep. The insurance companies compile tons of data, but I’d doubt that it includes “Friends of MD’s who own testing facilities”. Then again, perhaps they do. Someone could take a lesson from Wall Street, where brokerage firms and exchanges have developed pattern recognition software to identify traders who are a bit too friendly with each other to the detriment of the average schmuck trying to make a trade. Of course enforcement is another story…most of those caught are told to cool it for a while and/or get a slap on the wrist, a token fine, and maybe a few days off. Sooner or later they find another way to beat the system, and the cat-and-mouse game continues, like the Spy vs Spy cartoon. On the other hand, the insurance companies should be the last in line to call someone out for unethical practices. It’s always been my contention that one of the worse things that ever happened to this country was the business of insurance. Throw enough money into anything and it creates many more serious problems than it was supposedy intended to mitigate. Involve the government and the problems multiply exponentially. So who can we ever trust to watch the store? Evidently no one when this much money is involved….

  2. Ed
    December 14, 2011 at 2:46 pm

    I think this is a chicken/egg which comes first. I am an orthopod. I order A LOT of MRI’s. I don’t own an MRI, but with all of the MRI’s I order, I WISH I owned one. I think it’s a matter of figuring, I ALREADY use this technology quite a bit. I may as well profit from it. And Doug, “a thousand dollars per MRI profit” is WAY off my friend. I would think that with the investment on the machine itself, the overhead (power, space, maintanence, tech salary, liability insurance service contracts, software upgrades etc) the profit is no where near that.

    • Doug Farrago
      December 14, 2011 at 2:51 pm

      Good points. The $1000 number came from the reference.

  3. Griff
    December 9, 2011 at 1:12 pm

    To some degree, this is the same as psychiatrists involuntarily admitting patients to their own hospitals/services. I suspect that only additional bureaucracy will result just like the massive legal machinations most states now have regarding involuntary treatment.

  4. Nick
    December 9, 2011 at 7:37 am

    I once knew some guys who drank so much Coke that it was most economical to have it delivered wholesale rather than pick it up at the grocer. I think the same thing may be going on here. MR is a powerful diagnostic instrument for musculoskeletal pathology. The orthos who like this technology the most are the ones who have decided to invest in a machine of their own. In other words, the order of causation could go either way: Drs want to profit so they order MRIs OR Drs want to order MRIS and profits result. Just becareful with the Stark violations.

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