Posted by Bill Sandweg on 21 June 2011.
I recently wrote about the fact that medicine is a business and that we are its customers. At the center of the debate raging in this country over health care, and especially Medicare, is the rate at which health care costs are rising. They are going up fast and the trend shows no signs of abating any time soon. How can we slow the growth of these costs?
Many of those who have commented on the problem criticize the underpinning of our current system: Fee for service. Doctors and hospitals don’t get paid to keep us well. On the contrary, they get paid the most when we get sick. When we are well, we may go see the doctor for a check up once a year or for a routine mammogram. Not much money there and we don’t go to the hospital at all if we are healthy. There is no financial incentive for health care providers to keep us well. Many commenters believe there should be.
Instead of fee for service in which doctors and hospitals only get paid for treating a sick person, what if they were paid to keep us well in the first place? There have been a number of pilot programs which have experimented with such a payment system. Generally, they have been successful in keeping patients out of the hospital and thereby reducing the overall medical expenses of treating these patients. In one experiment, nurses made daily calls to patients to assure they were taking their medications. The patients who received the calls had fewer hospital visits than those who did not. The new health care law includes some money for more experiments with paying to keep patients healthy.
The increasing cost of health care will be a major challenge for us going forward as a country. We should encourage innovations which will improve health outcomes while at the same time reducing costs. Healthier Americans will need less medical care.