July 29, 2009

Health Care Reform: Changing Physician Incentives

Question: How do we incent health care providers (specifically physicians, because they are the ones in control of care) to provide the best care, not just the most expensive?

This answer comes from a few sources, as everyone seems to be talking about health care reform!

In a new article in the NewYorker, Hertzberg breaks down why we're having such a hard time with health care reform:

"Americans, polling shows, have long been as receptive as Europeans to the principle of universal health care. Six times since 1948, we have elected Presidents committed, at least on paper, to that principle."

He goes on to say that most everyone believes that health care should be a human right, not a commodity - meaning that because you are part of a society and pay taxes to a government, you should be entitled to health care. However, he also says that pretty much everyone believes that a drastic change (say, to a system funded entirely by taxes that treats everyone based on their health care needs, not how much they pay) is not feasible.

I agree with Obama's initial health care reform principles (see them on healthcarereform.gov) and think the basic idea is to (in a way that will not increase debt) cover everyone for the services and procedures that are necessary and feasible, make sure coverage stays with people no matter what their job is or where they move, and in the process, make health care better.

After creating a system where everyone is covered, the immense administration costs for all the people and paperwork to make sure everyone gets reimbursed can stop being the focus, and people who work in health care can focus on what they have be trained to do, as clinicians, scientists, and care givers: provide great care and continue to figure out ways to make it better.

The way reimbursement works right now does not reward or incent prevention of illness, lifestyle changes (instead of invasive measures), or helping patients navigate through a system that is hard to navigate even when you're not sick. One of the systemic changes that has been proposed is to pay physicians set salaries, potentially with extra bonuses for good patient results. This means that no matter how many procedures a physician orders or how many patients s/he sees, s/he takes home the same salary. In places like the Cleveland Clinic, the Mayo Clinic, and a smaller hospital called Basset where this has been implemented, costs have decreased considerably and the level of care remains some of the best in the country (though I'm not sure what the standards used for that are).

The complaints with this have mainly been along the lines of:
1) physicians wouldn't make as much money, and it takes away from the entrepreneurial side of the professions (says the AMA, some physicians).
2) the model is not replicable. Places like the Cleveland Clinic and the Mayo Clinic receive a lot of federal money for teaching their interns and residents, who perform a significant proportion of the work for a very minimal cost.

Lots to think about - more soon.

To hear more perspectives on the role of physician payment in health care reform, see the following links in the NYT blogs: (thank you NYT!)

*the Well Blog's take (the original article with more details about Cleveland Clinic, Bassett, and The Mayo Clinic deals)

*roomfordebate Blog (perspectives from many people in the field about how doctors are taught to order up more procedures, because they, not coordination of care or explaining things thoroughly so to prevent future hospital trips, are rewarded by our current system)

*economix Blog (discusses what would be the "just" pay for physicians, in economics terms)

“It is a model that has taken the pursuit of medicine from a profession — a calling — to a business,” -President Obama in a speech about health care reform

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