Friday, September 19, 2008

Health Blog : What's the Best Way to Pay Doctors?

Pay doctors for every procedure they do, and you give them a financial incentive to perform unnecessary treatments. Pay them a set price per patient, and you create an incentive to deny needed treatments. So everybody in health care is trying to find a third way that — ideally — ties payments to high-quality care that manages to reduce unnecessary costs.

In an essay in this week's New England Journal of Medicine, Harvard health economist Meredith Rosenthal lays out some of the experiments now underway. They include:

The medical home model pays primary care providers to coordinate care for patients with chronic illness, and typically includes pay-for-performance bonuses for delivery of recommended preventive care.

Episode-based payments such as the Prometheus System pay doctors a set fee for treatment of a given condition. The fee is adjusted based on a patient's individual characteristics, and there's a warranty for care if complications arise. There's also an incentive for docs who provide care that meets both quality and efficiency standards.

In the Medicare Physician Group Practice Demonstration program, a few large physician groups are trying to meet quality guidelines while saving money (as compared to risk-adjusted spending on other patients in the same market). Groups that manage to meet both goals get a big share of the savings.

Rosenthal closes with a rather gloomy thought that puts the whole endeavor in doubt. She writes: Given that the two major goals of reform are to constrain spending growth and to move money from more intensive to less intensive settings — from doctors who carry endoscopes and scalpels to primary care physicians, for example — there will be substantial resistance to even the best-designed plans.


http://blogs.wsj.com/health/2008/09/17/whats-the-best-way-to-pay-doctors/