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Fixing the financial incentives in medicine

Posted Aug 13 2009 8:02pm
Medco (this is the pharmacy benefits company that settled for $155 million over charges of defrauding the federal government and paying kickbacks in 2006) manager Dave Snow has jumped into the healthcare debate. His idea is to force doctors to prescribe pre-selected treatments: if you diagnose A, you treat with B.

Obviously, Mr. Snow doesn't understand why medicine is an art. You have to take into account preexisting illnesses, risk factors, other medications, drugs allergies, drug intolerances, likelihood of compliance, and patient psychological, social and too often, financial factors to come up with a treatment. And then you should negotiate it with the patient to increase compliance and understanding. That is why B is often not the best choice. (Medco may not even offer B on its formulary, which is an additional reason to choose C.)

Granted, there are numerous problems with our medical system, and there are many possible solutions. In contrast to Mr. Snow, let's look a little deeper at why we have so many problems:

1. The financial incentives are all wrong.

a) You don't get paid more for getting things right: you get paid more for ordering more tests, increasing the number of visits, and spending the shortest possible time with the patient. Four fifteen minute visits pay almost twice as much as one hour-long visit. Spend an hour performing a detailed evaluation of a complex patient, get the diagnosis right and bingo! you have just forfeited reimbursements for additional visits, as well as earning considerably less for the hour you just spent than if you had seen patients with 4 sore throats.

b) You don't get paid for keeping people well, in general.

c) Outcome measures are rudimentary. Doctors are currently graded on whether a sufficient proportion of patients have regular mammograms, PAP tests and vaccinations, and whether their patients with chest pain receive appropriate emergency medications. But these measures indicate nothing about the proportion of correct diagnoses, or patient satisfaction. And they may incentivize bad behaviors. For example, the reasonable requirement to give all patients with pneumonia an antibiotic within 4 hours of ER arrival led to excessive antibiotic prescribing in every patient who "might" have had pneumonia.

d) Primary care docs are paid very little relative to docs who perform procedures. Procedures rule medicine. High profit procedures like cardiac catheterizations, neurosurgery, orthopedic surgery, and endoscopy subsidize ordinary patient care in hospitals and clinics. Hospitals pay hospitalists considerably more than they can bring in (in reimbursements from third party payers), in part because hospitals cannot function without them, but also because these primary care doctors order more lucrative tests and procedures on their patients.

e) Due to concerns about malpractice and meeting patient expectations (most patients expect that everything that can be done for them, will be done) doctors order more tests and procedures than are justified by existing guidelines.

f) The medical literature is contradictory on an enormous number of medical issues, so doctors are hard-pressed to trust the literature to give them the best or most accurate answers...leading to increased testing and procedures, since our culture punishes sins of omission much harder than sins of comission, or "doing too much."

g) The negative results of "doing too much" fail to be acknowledged or quantified. How many cancers are caused by unnecessary CT scans? I have no idea. How many patients die after undergoing cardiac catheterizations, when a medication adjustment might have been as effective? Studies of such questions fail to be published in major journals and do not appear to have affected clinical practice.

h) Professionalism currently demands from doctors that they meet the "standard of care" provided by other local practitioners. In part because the medical system is so complex, and there are so many medical tests, procedures and specialties, our expectation of ourselves as practitioners is more about ordering the right test and referring to the right specialist, rather than correctly diagnosing the patient. We expect that the test or the specialist will provide the answers if we do not have them. Cognitive skills have been devalued.

There is little financial or professional incentive to keep studying and struggling to find answers for the most challenging patients. And no financial or other reward if you succeed.

More later...
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