How Should Doctors Get Paid? – Part 3

Should we be paid for outcomes?

This is often proposed, but I have trouble understanding it. Real outcomes are not blood pressure or blood sugar numbers; they are deaths, strokes, heart attacks, amputations, hospital-acquired infections and the like. In today’s medicine-as-manufacturing paradigm, such events are seen as preventable and punishable.

Ironically, the U.S. insurance industry has no trouble recognizing “Acts of God” or “force majeure” as events beyond human control in spheres other than healthcare.

There is too little discussion about patients’ free choice or responsibility. Both in medical malpractice cases and in the healthcare debate, it appears that it is the doctor’s fault if the patient doesn’t get well.

If my diabetic patient doesn’t follow my advice, I must not have tried hard enough, the logic goes, so I should be penalized with a smaller paycheck.

The dark side of such a system is that doctors might cull such patients from their practices in self defense and not accept new ones. I read about some practices not accepting new patients taking more than three medications. In the example I read, the explanation was not having time for complicated patients, but such a policy would also reduce the number of patients exposing the doctor to the risk of bad outcomes.

A few comparisons illustrate the dilemma of paying for outcomes:

Do firefighters not get paid if the house they’re dousing to the best of their ability still burns down?

Does the detective investigating a homicide not get a paycheck if the crime remains unsolved?

Does the military get less money if we lose a war?

Even if we were to accept and embrace outcomes-based reimbursement in health care, how would we measure outcomes?

We already know that an episode of care, say a hospitalization for heart failure or a COPD exacerbation can seem successful, but the 30-day readmission rate can cast doubt on that. First, of course, not all of that “outcome” is dependent on a single provider or even a group of providers, but involves ancillary staff, hospital resources and much more. This is one of the thoughts behind the Accountable Care Organization movement. Second, much of what happens in sickness and in health is not provider dependent at all. An unusually miserable weather pattern can make COPD relapse rates higher one month than the next, for example. What kind of bureaucracy would it take to create a payment scheme that factored in such things? And would our health care dollars really be better spent on such accounting efforts than on nursing staff levels or something else?

Other than short term outcomes for gallbladder surgeries, pneumonia hospitalizations and such discrete episodes of care, how would we measure “outcomes”, for example in primary care and disease prevention?

For pediatricians, would we follow their patients’ health into old age to determine how good their early care was? How about when patients switch doctors, often because of insurance coverage changes – who gets the credit or blame for future bad outcomes?

In short, I think outcomes-based reimbursement works only in a limited sector of healthcare. For primary care, and specialty care that spans over any length of time, we need to get back to basics in the form of Honest Pay for Honest Work.

And that will be the topic of my next installment…

2 Responses to “How Should Doctors Get Paid? – Part 3”


  1. 1 Linda DeLia April 27, 2014 at 10:11 am

    This column is well-written common sense, a bright light exposing the soft edges of murky thinking.. Who could possibly argue with this crystal-clear logic? I especially loved the firefighter example.

    And yet I know the arguers are out there.I’m looking forward to Honest Pay for Honest Work.

  2. 2 Peter Balsam, MD May 8, 2014 at 1:28 pm

    I have worked in 4 VA hospitals. The “outcome” of veterans receiving an appointment within 2 weeks is near perfect; it is actually rare that this is true but by keeping a list off the computer and adding patient’s names within the two weeks that someone moves the name from the “private” list to the computer, the outcome looks great. Voila!! Victory!!
    While outcomes are a valid measurement, they’re not the only measurement. Depending only on outcomes is the antithesis of Total Quality Management which places great weight on the process. The pendulum continues to swing back and forth.


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