health care payment system – The Health Care Blog

How Doctors Are Trapped

May 17, 2012• 37

By John Goodman

Every lawyer, every accountant, every architect, every engineer — indeed, every professional in every other field — is able to do something doctors cannot do. They can repackage and reprice their services. If demand changes or if they discover a way of meeting their clients’ needs more efficiently, they are free to offer a different bundle of services for a different price. Doctors, by contrast, are trapped.

To see how trapped, let’s look at another profession: the practice of law. Suppose you are accused of a crime and suppose your lawyer is paid the way doctors are paid. That is, suppose some third-party payer bureaucracy pays your lawyer a different fee for each separate task she performs in your defense. Just to make up some numbers that reflect the full degree of arbitrariness we find in medicine, let’s suppose your lawyer is paid $50 per hour for jury selection and $500 per hour for making your final case to the jury.

What would happen? At the end of your trial, your lawyer’s summation would be stirring, compelling, logical and persuasive. In fact, it might well get you off scot free if only it were delivered to the right jury. But you don’t have the right jury. Because of the fee schedule, your lawyer skimped on jury selection way back at the beginning of your trial.

This is why you don’t want to pay a lawyer, or any other professional, by task. You want your lawyer to be able to reallocate her time — in this case, from the summation speech to the voir dire proceeding. If each hour of her time is compensated at the same rate, she will feel free to allocate the last hour spent on your case to its highest valued use rather than to the activity that is paid the highest fee.

Care Innovations Summit

Feb 2, 2012• 9

By Kent Bottles, MD

Anyone who is concerned about the future transformation of the United States clinical delivery system should pay attention to the Care Innovations Summit. The selection of presentations as well as the content that was discussed says volumes about where CMS believes payment is headed. Speaker after speaker stated that decreasing the per-capita cost of health care and increasing the quality patients receive is the dominant political, social, and economic issue for all Americans.

Marilyn Tavenner, the new Acting Administrator for the Centers for Medicare and Medicaid Services, outlined what she saw as the major accomplishments of the past few years. Her list included providing partial relief for 3.8 million seniors who hit the prescription drug “doughnut hole,” creating high risk pools for 45,000 Americans, creating a consumer website, allowing young adults to stay on their parents’ health care insurance until age 26, eliminating denial of coverage for patients with pre-existing conditions, eliminating lifetime and annual health care insurance maximums, increasing the coverage of many prevention measures, creating pilots to explore how to base payments on quality not volume, and getting the Innovation Center up and running.

Atul Gawande, MD, the Harvard surgeon and New Yorker author, presented the morning keynote. Gawande, the author of three books on health care (Complications, Better, and The Checklist Manifesto), said the “cost of health care is destroying the American dream.” In Massachusetts the state government sent nearly a billion dollars to local schools to pay for smaller class sizes and better teachers’ pay, but every dollar was diverted to covering higher health care costs. For each dollar added to school budgets, the costs of teacher health benefits consumed $1.40.

Gawande listed three causes of our current health care problem: business interests, government bureaucracy, and the sheer complexity of delivering clinical care in a broken system. He focused on the last of these causes and noted that there are at present 13,600 diagnoses, 4,000 medical procedures, and 6,000 medications. In 1970 the average patient saw two physicians for their medical conditions; today the average patient has more than 15 physicians consulting on their care. He also stated that the health care system “trained and hired physicians to be cowboys, when what we really need are pit crew team members.” He is also hopeful because the health care systems that have the best results are not the most expensive.