Medicare currently pays doctors in a “fee for service” system, with little regard for quality of care or patient outcomes. The more procedures or office visits, the more revenue a physician generates.
Instead of spending time with patients or counseling them in preventive care, there is financial pressure to see as many patients as possible. And this financial pressure is a fundamental reason why health care costs are spiraling out of control. It’s no wonder both doctors and patients are dissatisfied with the system.
There is little data showing that providing more care actually benefits patients. For decades, researchers at Dartmouth College have even gone so far as to suggest that more medical services, at higher cost, do not necessarily equal better patient outcomes. Large integrated health systems, like Minnesota’s Mayo Clinic, have shown it’s possible to provide higher quality care while using fewer medical services.
But there are challenging obstacles. Doctors practice in a fragmented delivery system, making it difficult to consolidate into integrated systems. And there is tremendous resistance to changing the status quo. After all, one doctor’s “unnecessary care” is another physician’s income stream.
It’s imperative that physician payments be divorced from the volume of services provided. Until we change the way doctors are financially incentivized, no amount of reform will result in meaningful cost control.
I encourage you to listen and vote in this week’s poll, located both below, and in the upper right column of the blog.
Please suggest future ReachMD Poll topics by emailing Poll@ReachMD.com.
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There has been a lot of discussion about paying for quality, but the logistics of this seem too challenging. Just paying for reporting (which is ongoing in a pilot phase) has proven to be difficult. Paying for quality also puts sicker and disadvantaged patients at risk because some physicians may not want to keep patients that drive their numbers down.
Another issuse is the documentation and process for billing. It is incredibly cumbersome and time consuming. I doubt a pay for performance model would make this any easier.
The key is time. You need to pay physicians for the time they spend with patients. Make this easy to bill and code for as wekk. Specialists should also get paid for time as well. If counselling a patient about why not to get a knee arthroscopy was better renumerated, maybe their would be fewer of these procedures.
Medical care is so fragmented especially when patients see mutiple doctors. There is absoultely no incentive to keep wasteful tests and treatments in check. If the doctor writes the most broad specrum antibiotic which is expensive rather a eually effective cheaper antibiotic for a simple wound, would the patient object? For one thing, 95% of doctors have no clue how much the antibiotic costs, the patient does not give a damn if his insur picks the bill. This kind of behavior and wastage is marbled deeply in our sysytem. There is no public awareness of this and unless something is done on this front, we’ll see angry doctors and patients who will complain of interference. An efficient doctor is penalised in our system but a doctor who is business savvy and knows how to bill insur and add extra follow up visits will make the most of the system. Removing a skig tag pays more than doing a medication reconcilation (which needs broader knowledge) to make sure the patient is not on worrisome medication combinations. It’ll be a diificult transition if we stop fee for service but in the end majority of doctors will adjust and do the right thing for their patients.
Joe the Patient
I went to obtain an informed consent,
And inform the patient what that meant,
I spent the next several moments explaining
Concepts I’d learned over eight years of training.
The patient said: “Fine,
I am ready to sign,
Just inform me what this procedure will cost”.
And I had to admit I was lost.
I can lecture on stents
‘til my face turns cyanotic,
Assure a patient we treat flat lines
Like they’re merely asymptotic,
But billing codes for DRGs
Are a topic Gordian-knot-ic…
I told this patient, let’s call him ‘Joe’,
That his particular price I didn’t know,
But if I knew, I couldn’t say,
If Medicare or insurance was to pay.
He could try looking up reimbursement rates
On Medicare.dot.gov,
And if stymied at their portal gates
Joe really ought to love
The government rationale for why
In Medicare’s case the Freedom of Information Act…simply does not apply.
Now, Patient Joe was frugal, didn’t buy beyond his means,
And was dead-set on keeping his own body free of liens.
Said Joe: “I can’t sign an informed consent
If I’ve not been informed of price!”
I sighed, “Then you’ll have to sign this other form,
Entitled ‘Against Medical Advice’.”
Joe huffs and says: “…well, ok, but what about my stent?
I may just have to sue you for abandonment!”
Then he laughs and says “Just kidding doc, this system really sucks.
Howzabout just you and me, say, cash, three hundred bucks?”
I mustered all my dignity and drew myself erect,
And…and…
(“meet me in the alley out back at nine. Here’s a razor, and some Betadine.”)
PHYSICIANS need to make these changes, and stop waiting for someone to do it for them. Kevin constantly says “we” as in society should do these things. Everyone else has their own problems. If physicians want change, they will have to do it themselves.
And I thought all unnecessary testing was caused by lawyers? You mean some doctors make money from it?!?!?! Blasphemy!
Certainly, the fee for service physician reimbursement model has a potential conflict of interest. Without question, the profit motive influences behavior. However, before we put all physicians on salary, let’s remember that lawyers, accountants, car mechanics, financial advisors, insurance agents, salesmen and hosts of others have incentives to sell us more advice and services than we truly need. Do we want a system that aims to attack everyone’s potential conflicts or only physician’s?
1) The payment disparity between primary care and specialty care results in inequality among medical students for specialty selection.
2) The payment disparity between regions of the country results inequality of physician distribution.
3) Patients feel powerless.
4) Payments to physicians promote the “more is better” mentality.
Solution:
Make payment among all specialties the same.
Make payment in all areas of the country the same
Let patients vote with their feet.
Physicians get paid the same amount if they are providing a 20 minute procedure or a 20 minute consultation.
How:
Upon Board Certification in ALL specialties, each physician receives $8.0 Million (median lifetime earnings of all physicians). This is delivered tax free and in a lump sum. The physician can then do with it as he pleases, but he will receive no more than that for providing medical care over the next 20 years. He can pool it with other docs to form groups and larger offices or he can open his own office alone. Either way, his staff salaries and business expenses come out of the lump sum. Every year, the doc has to report to the IRS how many RVU’s he performed the previous year. If it is less than 4000, then he owes a “tax” (prorated) for underperforming that year. If it is more than 4000 it gets carried over to the next year. Total lifetime RVU’s about 80,000.
American Citizens and those in our country legally can see whomever they want, whenever they want, and wherever they want without cost or co-pay.
Results:
Med students will then pick specialties based upon interest and not finances. The trend will be for more primary care as payment is the same other specialties and there are fewer years in training. Physicians will pick locales based upon need and not wealth of communities. Market forces work to more evenly distribute medical care and specialties.
“Bad” docs get taxed (no patients at their door), “good” docs retire early. Government gets a clear picture of physician payment expense for 20 years.
Dr. Kevin.
I agree with you. I see nothing but an upside for we patients/consumers. However,l ike most of health care reform, I cannot begin to imagine its implementation.
I suspect there are those specialities for whom fee-for-service works quite well and they’re not about to see their incomes dip.
And where do the insurers stand on this?
Dr. Kevin – I’d love to see you and your colleauges address the practicalities of this and other ideas that have been floated.
Any real reform is going to impact negatively on groups of powerful people (docs, insurers), regardless of the path chosen. I’m becoming discouraged and am worried health care “reform” is going to simply be another band-aid that results in very little change.
It should be remembered that physicians are professionals, no different from military officers, senators, diplomats, or the president of the United States. They are paid salaries based on their grade and time in rank as in the military and State Department.The others are paid by common agreement and custom. We are paid like “scnittwarenhandlern”, that is like factory workers. It is also one of the primary drivers of increasing health care cost along with the insurance model of financing health care. We cannot aford the system that presently exists. Solution? Put all doctors on a salary.
Upon Board Certification in ALL specialties, each physician receives $8.0 Million (median lifetime earnings of all physicians). This is delivered tax free and in a lump sum. The physician can then do with it as he pleases, but he will receive no more than that for providing medical care over the next 20 years. He can pool it with other docs to form groups and larger offices or he can open his own office alone. Either way, his staff salaries and business expenses come out of the lump sum.
You’re kidding right?
My husband’s current solo practice already has a staff salary & benefits overhead of $525,000 (salary, matching SS + medicare, workers comp, vacations, 401(k) contributions + matching, health insurance, prescription drug plan, vision, dental and LTD), and that does not include his salary and hasn’t paid the rent, utilities, supplies etc. either!
How excactly do you expect anyone to operate a medical practice for just $400,000 a year and that sum includes the physicians pay too?
As a specialist in I have to take exception to the response by TWAW.
“1) The payment disparity between primary care and specialty care results in inequality among medical students for specialty selection.”
I would argue the converse. The inequality among medical “students” leads to a payment disparity between primary care and specialty care. Primary care physicians like to conveniently ignore the fact that more of us overpaid specialists are near the top of our medical school classes. They also like to conveniently ignore the fact that specialty residency is far more demanding physically, emotionally, and chronologically (2-5 years of life for the training) It is unfathomable that all physicians should be paid the same amount. Just like anything in life wwe get paid for higher achievement and for working harder. Get real.
As I continue my “rant” as a specialist, also consider this fact. Most family physicians are employed these days. Incentives and productivity formulas are in place but rarely translate into increased productivity. My primary care brethren rarely squeeze in patients at the end of the day (when I call and ask for a medical clearance or a patient has an urgent problem) Why work harder if I’m not getting paid. Usually I’m told to send them to “walk-in or the PA of NP”. When they call me, I’m expected to jump and “expand” my day. Most primary care physicians would not be appreciative if they sent a new patient to me and the pt. was only seen by the ENT PA-C. My partner and I employ 15 office staff and contribute to the economy as a small business. I spend countless hours running my business. I could hire a practice administrator for $60-100K/year, but they wouldn’t do it as well as I can. I take personal and financial risks on new technology and innovation. In my 13 years of practice this clearly has translated into better outcomes in most cases. It has also cost me financially when they didn’t. The payoff…i make more money, but I work harder for it. I don’t, however, compromise care of patients for higher income as was implied. I resent this common and sickening assertion. There are crooks in every branch of medicine as there is in every branch of life.
Employed physicians doing different duties like little soldiers. Let the government decide what specialty you practice and pay you what they decide is appropriate. We will be like the Chinese olympic athletes channeled into their sport at a young age without the benefit of using their own free will. When we fail to glorify “mother country” are we then cast aside for the next in line. Sounds like siocialism/communism to me. I may seem melodramatic, but it is a slippery slope. My final point is that almost all of those overused radiology tests are not ordered by the radiologist. The vast majority are ordered by the primary care physician in need of some butt cover. If you tell me that tort reform is needed to achieve this utopia you seek, ask your president/attorney Obama what he thinks about limiting liability judgements. This problem has dimensions that go way beyond some of the perspective offered here..
Peace.
Docs should get paid by the hour like every other professional who isn’t paid for results. Like every other professional, that payment should be a matter of free negotiation between doctor and patient. Private payers reimburse patients according to their contract, public payors pay whatever they decide to pay with docs either accepting that as payment in full by their choice on a case by case basis. Public payors hourly rates should vary with some rational connection to the private market place, which is likely to be a higher hourly rate for people with additional training time for additional skills and experience–otherwise, why spend extra years learning high-risk OB or doing a hand surgery fellowship?
I am not too sure that it is a good thing for patients, even the poor, to have third party payment for any professional fees. It is the hospital care that breaks people. Perhaps we should have dug in our heels 70 years ago on keeping insurance reimbursement for hospital and lab service only while keeping physician care solely a matter between doctor and patient– whom to charge what. Would have kept it more of a sacred calling. The docs who were adamant on that point in the 30’s and 40’s were seen as atavistic diehards, even as rednecks. Yet every ill that they predicted from third party payment has indeed abounded. They look more like wise prophets now.
If doctors were paid only by patients, and could not profit from recommended hospital care or labs, then the money saved on those things would lower insurance premiums enough that most people would have no problem paying professional fees, and doctors would be glad to extend charity to the rest.
I have come up with a new payment system for doctors that attempts to do exactly what you say in this blog. Realigning incentives and most importantly pay MDs for what they do and what you want them to do – spend time with patients.
http://drbrenner.blogspot.com/2009/06/medicare-reform-part-3-new-model-for.html
Basically I establish an hourly rate that is influenced by experience, years of training, board certification, CME, and that is multipied by a complexity charge (e.g. the very young and very old are more complex than a 29 year old w/no med problems). And in the blog I describe how to prevent abuse by docs (charging for hours they don’t see patients).
I’d be interested in your comments. feel free to email, twitter @irb123, or just put comments in my blog.
TWAW
Wow! I hope you’re kidding. That was an extremely ignorant suggestion. I am currently a second year medical student debating which specialty I want for my future years as a physician. Like all medical students there is a bit of “altruism” involved in my decision but for me, being 35 years old, I have to also consider my financial future. Choosing a specialty isn’t as simple as deciding which one suits your fancy. You have to consider the years involved and the fellowship time. You also need to consider the pay. If I choose family practice I will earn a relatively low salary compared to other physicians and thus I will spend many years paying back my over $200,000.00 student loans. I really don’t want to be paying student loans back while i am in my 50’s.
Many students, by the end of the 4th year in medical school, choose those specialties that have shorter residencies and higher quality of life like family practice, emergency and if they can match, ENT, Urology, Derm etc. They no longer want to be a student and want to get on with it. The idea of spending 7 or 8 additional years doing a neurosurgery or CT residency/fellow isn’t worth it. Not to mention the fact that those specialties work you to the bone and leave little room for a normal life outside of work. Because of this there needs to be financial incentive for students to choose these fields.
Without the financial reward for Neurosurgeons and other specialties with 7 year + residencies we would have less students who choose them. We would effectively kill the future of those specialties. So suggesting that a family practitioner and a neurosurgeon should make the same is silly. It would do nothing but result in a drastic shortage of neurosurgeons and other demanding specialties. There is no reason that a specialist who trains for all of those years and works 12 hours + a day in a highly intense field shouldn’t earn more than a physician who trained for less.
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