When Profits Drive Costs
May 28th, 2009 by Jeb Foster
Finally, someone is putting some heat on doctors, who, just like mortgage lenders and AIG execs and the rest of us, are sometimes motivated by greed:
Somewhere in the United States at this moment, a patient with chest pain, or a tumor, or a cough is seeing a doctor. And the damning question we have to ask is whether the doctor is set up to meet the needs of the patient, first and foremost, or to maximize revenue.
There is no insurance system that will make the two aims match perfectly. But having a system that does so much to misalign them has proved disastrous. As economists have often pointed out, we pay doctors for quantity, not quality. As they point out less often, we also pay them as individuals, rather than as members of a team working together for their patients. Both practices have made for serious problems.
That passage is from Atul Gawande’s article in the New Yorker, and his words are sure to earn him a few enemies in the ranks of the American Medical Association. Let’s hope Obama and health secretary Katherine Sebelius read it.
Gawande, a practicing surgeon and award-winning author, visited a small border town in Texas that has the highest per capita health care spending in the country. He wanted to understand why this town was spending so much for care yet not actually delivering better health outcomes.
Doctors in McAllen, Texas, it seems, are a uniquely enterprising bunch, and they “treat patients the way subprime-mortgage lenders treated home buyers: as profit centers.”
Gawande isn’t the first to put the screws to doctors, but his article is perhaps one of the most unflattering portraits of the medical profession to date. We tend to idolize doctors and assume they operate solely with our best interests in mind. While most do, a few have let the profit motive take center stage.
If we’re to adequately reform our health care system, Gawande writes, we must address the issue of doctor compensation—specifically, we must develop a payment structure that rewards quality, not just quantity:
Activists and policymakers spend an inordinate amount of time arguing about whether the solution to high medical costs is to have government or private insurance companies write the checks … When it comes to making care better and cheaper, changing who pays the doctor will make no more difference than changing who pays the electrician. The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care. Otherwise, you get a system that has no brakes. You get McAllen.
Tags: Add new tag, health care, health care reform, medical greed
