One of the driving forces of debate in Washington and in state capitols across the country is the seemingly out-of-control upward spiral of health care costs. There are many reasons why health care costs are high and increasing. Among them are lack of transparency about the actual cost of care, high compensation for doctors, a technological arms race to get the latest in medical equipment, uneven distribution of doctors by location and specialty, and our old friend, “fee for service”. Fee for service is one of the main causes and it is the subject of increasing and justified criticism.
As I have pointed out on many occasions in the past, because doctors and hospitals don’t get paid for keeping you well, there is little incentive to do so. Because they get paid for performing some service, such as a test or a procedure, there is a bias toward doing tests and performing procedures, whether they are really necessary or not. Many in the medical community itself criticize fee for service as a system which rewards high-volume medicine without regard to patient outcomes, quality of care, or necessity.
Various departures from fee for service are being explored and implemented on, at least for now, an experimental basis. One such alternative is a capitated fee arrangement under which a group of doctors undertake to meet all of a patient’s health care needs for a fixed price. The doctors under these arrangements have an incentive to keep their patients well in the first place so as to avoid expensive hospitalizations and procedures.
Another alternative is a system under which the physician is paid on the basis of a successful outcome for the patient. For example, a doctor who performs a surgery which has a poor patient outcome is not compensated as highly as the doctor who gets a good result for the same surgery. No longer is the doctor paid simply for performing the procedure, regardless of how his or her patient recovers.
Still another alternative is to pay the entire health care team for “episodes of care” rather than paying each member of the team separately. This creates an incentive for the team as a whole to work cooperatively to get a good outcome and to keep costs down.
Many of these ideas are explored in a Wall Street Journal Report on Health Care, which appeared in the November 18, 2013 edition. Here is a link to the on line version of the report. http://online.wsj.com/itp/20131118/us/journalreport
Be an informed consumer. Agitate for improvements to our healthcare system. Support changes which improve outcomes while at the same time decrease or hold down costs.
