Doctors’ Pay: A Key to Health Care Reform

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Doctors’ Pay: A Key to Health Care Reform
June 20, 2009 in Physician Compensation, Supply of Medical Services | No comments

There is an interesting debate at the N.Y. Times discussing how to reform physician payment to increase quality and decrease cost.  Below is an excerpt from a Seattle emergency room doctor.

In this, they are half right: over-utilization is a driver of cost, and it is in part driven by doctors’ economic incentives. The underlying cause, however, is a bias within the physician compensation system that extravagantly rewards surgical procedures performed compared to “cognitive” services like diagnosis and medical management.In the E.R., for example, sewing a facial laceration pays far better than accurately diagnosing a heart attack. The same principle applies to any procedure — from angiograms to colonoscopies.The predictable consequence is that physicians gravitate toward lucrative procedural specialties. They perform more and more procedures, using expensive new technologies, driving costs ever higher.In this, they are half right: over-utilization is a driver of cost, and it is in part driven by doctors’ economic incentives. The underlying cause, however, is a bias within the physician compensation system that extravagantly rewards surgical procedures performed compared to “cognitive” services like diagnosis and medical management.

In the E.R., for example, sewing a facial laceration pays far better than accurately diagnosing a heart attack. The same principle applies to any procedure — from angiograms to colonoscopies.

The predictable consequence is that physicians gravitate toward lucrative procedural specialties. They perform more and more procedures, using expensive new technologies, driving costs ever higher.