Health policy experts rightly state that the physician payment system, which pays fee-for-service, financially encourages doctors to order more tests.
The opposite extreme, as we’ve heard many times, is the Mayo Clinic, which salaries their doctors.
But could there be unintended consequences to placing physicians on fixed pay. For one, you are going to seriously dent productivity. Now, some say that may be a blessing in disguise, since the numbers show that doctors who “do more” do not necessarily have better patient outcomes.
Practically speaking, however, patient demand will continue unabated no matter how doctors are paid. For instance, in the emergency room, Shadowfax says that if doctors don’t meet a certain quota of patients seen per hour, “I will need to hire another physician to staff my department, and, writ large, there will need to be 10% more ED physicians nationwide to keep up with demand. If those doctors don’t materialize, then the ERs will back up and waiting times and boarding will increase.”
Similarly in a primary care setting, “the demand for these services won’t go away just because the docs are working slower, and the consequence is that more PCPs will be needed to serve the same population, or that access to primary care services will erode.”
So, although I believe that the physician payment needs to be seriously overhauled, I’m not sure simply paying doctors on a fixed salary is the answer. Perhaps one reasonable compromise is a hybrid system, where 75 percent of compensation is fixed, and the rest comprised of bonuses consisting of productivity and quality measure incentives.
