Skip to comments.Why Pay Physicians Anything At All For Providing Healthcare?
Posted on 03/18/2013 8:35:03 AM PDT by Kaslin
Last week, the National Commission on Physician Payment Reform released its recommendations, calling for the elimination of fee-for-service healthcare within the next 5 years. This organization, funded by the Robert Wood Johnson Foundation, is populated by physicians from academia, the insurance industry and from the public policy world. Having former GOP Senate Majority leader and cardiac surgeon Bill Frist serving as honorary chairman gives the imprimatur of bipartisanship and legitimacy. However, Dr. Frist, a former academic himself, has long favored a government supervised healthcare system, and is therefore less than objective in this regard.
The Commission was formed to assess by what means and how much doctors should be paid. Their position is that payments to physicians are one of the key drivers of escalating healthcare expenditures. They want to pay for the sustainable growth rate (SGR or "doc fix") by cutting physician payments for services, just as they aspire to hasten the implementation of the Affordable Care Act by fast tracking new and unproven concepts such as accountable care organizations (ACOs), patient-centered medical homes and value-based purchasing.
Sadly, the objectivity of this group has been clouded by its ideology and perhaps itsself-interests. Although physician payment is one of the components of healthcare costs, it is hardly the major driver. According to a 2012 study from Jackson Healthcare, compensation to physicians was 8.6% of healthcare costs, or $216 Billion annually- amongst the lowest of the major Western nations. Germany spends 15% of their healthcare costs on physician compensation, Australia 11.6% and France spends 11%.
Placing blame for runaway healthcare costs solely on physicians is simply an attempt to divert attention from the real perpetrators. In his recent Time magazine feature story, Steven Brill painstakingly outlined how hospitals throughout the country are generating obscene charges and profits. Over 30% of healthcare spending is generated by hospitals, a large share of which goes to managers and executives; many taking home seven figure salaries. Ignoring this, the Patient Payment Reform Commission wants to give the hospital administrators, through the new ACO model, even more control by directing payments to them, effectively making them the gatekeepers of reimbursements. The false narrative that has been created for public consumption is that in doing so, savings are created by consolidating and delivering care more efficiently and effectively. So far this is simply false.
Two of the major drivers of out of control healthcare spending are medical liability and the 3rd party payment system.
Medical liability costs, both the money spent to defend claims and the awards, is greater in the United States than in all of the Western democracies combined. The largest contributor to these costs comes from extra tests ordered by physicians, to protect themselves from frivolous lawsuits-defensive medicine. A Harvard study in 2008 calculated these costs to be about 2.4% of healthcare spending or $65 billion annually. The 2011 newsletter of the American Health Insurance Plans (AHIP) reported that these costs were actually somewhere between $650-850B annually.
The 3rd party payment system is perhaps the most potent driver of runaway healthcare spending. Without any restraint on spending, largely because individuals are disconnected from the costs of their healthcare, patients routinely expect tests and procedures that may be unnecessary simply because someone else is paying the bill. Doctors have little incentive to dissuade this behavior since the cost is also opaque to them and the threat of malpractice always lingers in the background.
Physician compensation is not the reason that healthcare costs are out of control. Annual healthcare spending is estimated to be $2.7 Trillion. There are many parties uninvolved in direct patient care, who have devised ingenious ways to get a share of this limited pot of money. If one considers that the basic relationship in medical care is between one doctor and one patient, and that the physician is responsible for referrals, tests, hospitalization and x-rays, it becomes clear how others could profit by controlling physician behavior and reimbursement. When doctors have less discretion over their decisions, entities that have had a hand in imposing these controls stand to profit, and they currently are. As a result of current regulation and payment policies preventing physicians from competing against hospitals, doctors are often forced to direct patients to these institutions, where costs are often as much as 10X higher for the same services that could have been offered in a physician owned center.
It is easy to be swayed by "experts" who find it quite convenient to make scapegoats of doctors and their compensation; attempting to convince the public that fee-for-service is the problem while using worn out clichés such as "doctors are being paid for sickness instead of wellness". Physician compensation plays a minor role as a driver of escalating healthcare costs. Anyone who suggests otherwise is protecting their own interests and deflecting scrutiny away from the real culprits- the hospitals, the insurance companies, the federal government, and the trial bar.
exactly. draft them all into the army. pay them what we pay enlisted members of the armed forces. call it a day.
what could go wrong?
Frist, founder of HCA isn’t giving away free health care from their facilities unless it is government mandated to recieve Medicare/Medicaid payment. You can bet your bottom dollar. I’m sick of being told what to do by elite pos.
Oops - I forget - they will be exempted from Obamacare (but then all the good docs will retire and they'll still be in the same boat).
AS IF, ANYTHING the US government has a sterling track record at delivering ANYTHING in a way that is timely, efficient or cost effective!!!
Flip this on its head and ask back -
Why would anyone become a healthcare provider if they can just go on welfare for a better return on effort?
100% of ones wage taken is slavery. At what percentage does it become freedom?
Despite health care costs exploding as a physician we have not seen ANY increase in reimbursement for years.
I appreciate the thesis of the article. After all, if healthcare is a right, then physicians can be forced to provide care for free, just like I can be forced to give up my paycheck to pay for someone else’s care.
There’s not enough discussion of what rights really are when the GOP opposes Obamacare.
When your child needs brain surgery, your spine needs to be rebuilt, your mother’s faltering heart needs to be stopped and reconstructed - who wants to go with the lowest bidder?
“Dr.” Frist, you seem to believe that your fellow doctors are enriching themselves much too much.
Do you believe that a steroid product that has just signed a $22,000,000 5 year contract is “self-eniching?”
Do you think a plastic bosomed Hollywood type is worth $3,500,000 for the making of a single movie?
Do you think the CEO of the insurance company that governs doctor’s payments is really worth that $1,500,000 per year.
I really do not have to ask those question, I know the answers already
To be frank, I truly question and doubt your sense of values.
“Theres not enough discussion of what rights really are when the GOP opposes Obamacare.”
So, what are they?
Controlling doctors' fees and their methods of treatment, and thereby thoroughly bureaucratizing the field, ultimately make medicine unattractive as a profession and deter talented individuals from entering it.Cutting their fees is a good way to cut the supply of doctors just when the demand for their services are increasing. Smart move. Not.
Communists want doctors to get 3-4 times the pay of janitors. Just like in the soviet union. Look it up.
“Elimination of fee-for-servive healthcare within 5 years”?
I disagree that you can be forced to give up your paycheck. Part of it yes, but an entire paycheck? I seriously question that
What should the communists pay be? The ones that say doctors should be paid 3-4 times the pay of janitors?
Well, a right can’t require anything from anyone else other than they not infringe upon yours. Nothing anyone claims as a right can require property or labor from another.
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