Healthcare reform advocates often attribute high medical costs to fee-for-service payment, writes economist Linda Gorman of the Independence Institute in the winter 2013 issue of the Journal of American Physicians and Surgeons.” It is said that patients “want too much care,” and physicians “are too willing to fatten their pockets to provide it.”
“Pay-for-performance systems have long been championed as a way of eliminating medical practices that regulatory control advocates have identified as wasteful,” Gorman writes. Proof of effectiveness is, however, lacking. Gorman outlines serious flaws in the idea.
Decades of education research show the defects in trying to attribute outcome to a particular teacher. Pay for performance may end up paying for inputs like minutes spent in study rather than outputs such as students learning, Gorman explains. And a teacher’s efforts may take years to show up in measurable results.
A difficult patient may see many physicians. If the patient improves, what was the role of a particular physician? And what part did diet, illness severity, patient compliance, family support, and genetics play?
Government systems have strenuously fought consumer-based measures of value. But “bureaucrats spending other people’s money on third-party healthcare have very different values than those that arise when the private sector spends private money on health,” Gorman states.
She cites the priority rankings of various treatments in the Oregon Health Plan. Saving an individual life is considered much less important than promoting overall population health. Bariatric surgery to control obesity, for example, is ranked 33 out of 680, whereas surgery for an intensely painful, life-threatening strangulated hernia is number 176.
“The value that CMS [Center for Medicare and Medicaid Services] or any other bureaucracy places on providing a particular treatment for an individual patient is unlikely to accurately reflect those of the people being treated, or of the physician providing the treatment,” Gorman concludes. “The existing measures of physician performance used in pay-for-performance programs…may end up punishing or rewarding physicians for simple variance in their patients’ genetics, socioeconomic status, and co-morbidities. If that happens, it will be bad for patients, and bad for the physicians who treat them.”
The Journal of American Physicians and Surgeons is published by the Association of American Physicians and Surgeons (AAPS), a national organization representing physicians in all specialties since 1943.
Link to PDF of article: http://www.jpands.org/vol18no4/gorman.pdf