On January 8, the Sunday Boston Globe magazine carried a piece by Andy Levinsky, a suffering fellow mortal and son of a physician who nonetheless received a full measure of abuse at the hands of modern medicine. His lament is titled “Doctors, your patients’ time matters too”
There is so much that is right, or should be right, about this article. The author speaks from personal experience, is old enough to have memories of better days, and grew up in a medical family so he knows something of both sides. There is a comment from a Harvard Medical School professor, and a nod to some statistics; there is pathos and there is benumbed capitulation. He could have thrown in the 54% physician burnout rate reported by the AMA, the high medical student and physician suicide rate, the seven-figure salaries drawn by senior management in nonprofit hospitals and insurance companies, the ever-increasing insurance premiums that accompany the ever-decreasing level of service they purchase, and the fact that the only reasons that our healthcare system works at all well is that there are a lot of people who work very hard despite the absence of system incentives to do so, and that the rate of advance of medical science is still outpacing the rate of deterioration of the human and humane service components. To that we could also add the utter failure of all attempts to fix the situation, including empowering insurance companies to set rates of payment, emplacement of enormous regulatory bureaucracies and their reporting requirements, imposition of electronic medical records, the rapidly rising fraction of physicians who are salaried, and the lumping of all direct health service professionals under the title “Provider.”
As is the case with most such writing, including this article, there is a fundamental misperception of cause and effect and an unsubstantiated hope of some improvement and remediation. It appears to be a given that the fee-for-service system is what is driving rising costs and deterioration in service, and that an alternative payment system based on “value” will be the remedy. The problem with this analysis is that it is based on ignorance of the driving forces behind the current situation and assumptions that are contrary to fundamental human behavior and the operation of markets.
Human beings are strongly influenced by incentives and are wired to recognize them and respond appropriately. We are also very good at ranking incentives and preferring options that yield high reward per unit of effort, and we quickly recognize the behaviors that maximize reward. If those incentives are perverse, they will result in perverse behaviors on the part of the large majority of individuals, whether petty government officials or physicians. If the physician is employed by a system that is driven by economic imperatives (such as greed,) he will be strongly incentivized to maximize his economic productivity, regardless of any adverse effects on his nominal primary professional responsibilities. With a fixed rate of payment per unit of service, this means running volume of patients and ordering the maximum number of remunerative tests. The actual quality of the service rendered to the patient and the patient’s perception of the value he has received are utterly irrelevant to the incentive system, and the patient is completely disempowered in terms of adjusting the physician’s or system’s remuneration for those services. The actual payment is rendered automatically upon receipt of electronically generated billing codes, increasingly generated by clicking boxes in the electronic medical record with its built-in reminders to code to the max. The patient copayment is trivial, and almost no one refuses to pay it anyway, no matter how shabbily they have been treated.
So, one might ask, “why not go to a value-based system?” The problem here is the definition of “value” and the development of criteria for determining value, metrics for measuring value, and tweaks to the payment system to see to it that remuneration is properly aligned with value. I defy you to find any of the proposals for “value-based” systems that includes the individual patient outcome and perception of the value of the care received. All of the metrics are related to aggregated data, whereas medicine is practiced upon individuals. All metrics are easily fudged, and there is plenty of software out there already in place to see that it is done by the book. Recent experiences with two of these attempts to reward “value” have nicely pointed up the impact of perverse incentives. Hospitals were rated on their readmission rates, and penalized if they ranked high on this metric. Readmission rates promptly fell, but the number of patients bouncing back to the hospital still sick did not. To fudge the readmission rate data, such patients were “admitted to observation status” and logged as outpatients. A win for the hospital? The other concurrent perverse incentive was to minimize length of stay in the hospital. Sending patients home earlier not surprisingly resulted in more readmissions (no problem, they were admitted to observation.)
There was another adverse outcome, however, that was more difficult to fudge: post-hospitalization mortality also went up. What looked good for the hospital did not look so good for their customers, who presumably would have preferred to survive rather than to make pretty metrics.
I must now admit that I have no good idea about how to fix the hospital component of the healthcare system. There is so much waste and inefficiency, diversion of resources to management, PR and grandiose construction projects, and complex, indecipherable contractual pushing, shoving and boondogglery that a rational mind is left adrift. Add to this the wholesale reduction of the professional staff and trainees to interchangeable depersonalized widgets that can be swapped in and out of various niches and teams in a manner that destroys continuity of care and leaves every patient faced with a new troupe of strangers several times a week and cut loose from their long-term and trusted caregivers.
On the outpatient and office side, however, there could be a relatively simple path or paths to improvement. Foremost would be the empowerment of the patient as an equal partner in the transaction with the physician. This can be accomplished only by removing the third-party payment system from the equation. In the office setting, the insurance model is largely inappropriate, just as automobile insurance has no role in automobile purchase, routine repairs and maintenance, gas, oil and antifreeze. This is particularly true since medical “insurance” is not real insurance at all but an obligate first-dollar, third-party payment system that exacts a mandated 12.5% tax on every premium dollar (in Massachusetts, insurance companies are required to spend 87.5% of premium income on clinical services, and get a no-questions-asked 12.5% retention off the top, plus whatever else they can finagle by stretching the definition of services.) In return for being the principal payor for office visits, the patient will be empowered to demand a level of service commensurate with what he pays; likewise, the physician will be able to price his time and effort according to his perceived and publicly accessible qualifications and the time and effort he expands on the patient’s behalf. There is room here for negotiation and for governmental or other subsidies to support patients with limited means, and for prepaid annual practice memberships or other arrangements mutually satisfactory for physician and patient and free from the present proscriptions of such activities by rigid insurance contracting, including by Medicare. The physician who serves his patients well and the patient who is willing to pay fair market value will both prosper in such a system. The impersonal rat race doctor who is really working for the Man and not for the patient will deservedly fade away and not be mourned.Tweet