Sending Back the Doctor's Bill
Brett
The Nation
Sending Back the Doctor's Bill
By ALEX BERENSON
HOW to fix the health care system?
Easy, liberals say. If Washington would just force cuts in
prescription drug prices and insurance company profits, plenty of
money would be left over to cover the uninsured.
Conservatives prefer to argue that the answer lies in forcing people
to pay more of their own medical costs.
But many health care economists say both sides are wrong. These
economists, some of whom are also doctors, say the partisan fight over
insurers and drug makers is a distraction from a bigger problem: the
relatively high salaries paid to American doctors, and even more
importantly, the way they are compensated.
"I always find it ironic that when I go to doctor groups and such,
they always talk about the cost of prescription drugs," said Dana
Goldman, director of health economics at the RAND Corporation, a
nonprofit research institute in Santa Monica, Calif.
Prescription drugs cost, on average, 30 percent to 50 percent more in
the United States than in Europe. But the difference in doctors'
salaries is far larger, Dr. Goldman said.
Doctors in the United States earn two to three times as much as they
do in other industrialized countries. Surveys by medical-practice
management groups show that American doctors make an average of
$200,000 to $300,000 a year. Primary care doctors and pediatricians
make less, between $125,000 and $200,000, but in specialties like
radiology, physicians can take home $400,000 or more.
In Europe, however, doctors made $60,000 to $120,000 in 2002,
according to a survey sponsored by the British government in 2004.
Given the years of training that doctors require and the stress and
importance of their jobs, few would disagree that they should be well
paid. In addition, with a year of medical school now about $30,000,
many doctors leave school deeply in debt. And many doctors would argue
that cutting salaries would only persuade talented, college graduates
to pursue better-paying professions.
Still, the lower salaries are a significant part of the reason that
European countries spend less on health care than the United States
does - a fact liberals avoid mentioning when they preach the
advantages of a European-style single-payer system.
Americans generally do not seem to mind the fact that doctors are well
paid. In public opinion surveys, doctors usually rank as the most
trusted professionals. Congress has repeatedly blocked Medicare's
efforts to reduce the amount it pays for each procedure doctors
perform, even though overall Medicare payments to doctors are soaring
and the cuts are legally required to keep the program's budget
balanced.
The way that doctors are paid may be an even more significant factor
driving up costs and may lead to unnecessary care, said Dr. Peter B.
Bach, a pulmonary physician at Memorial Sloan-Kettering Cancer Center
and a former senior adviser to Medicare and Medicaid.
In the United States, nearly all doctors are paid piecemeal, for each
test or procedure they perform, rather than a flat salary. As a
result, physicians have financial incentives to perform procedures
that further drive up overall health care spending.
Doctors are paid little for routine examinations and very little for
"cognitive services," such as researching different treatment options
or offering advice to help patients get better without treatment.
"I don't have a view on whether doctors take home too much money or
not enough money," Dr. Bach said. "The problem is the way they earn
their money. They have to do stuff. They have to do procedures."
Primary care doctors and pediatricians, who rarely perform complex
procedures, make less than specialists. They are attracting a
declining percentage of medical students, and some states are facing a
shortage of primary care doctors.
Doctors are also paid whether the procedures they perform go well or
badly, Dr. Bach said, and whether they are crucial to a patient's
health or not..
"Almost all expenditures pass through the pen of a doctor," he said.
So a doctor may decide to perform a test that costs a total of $4,000
in order to make $800 for himself - when a cheaper test might work
equally well. "This is a highly inefficient way to pay doctors," Dr.
Bach said.
Medicare, especially, does not like to second-guess doctors' clinical
decisions, said Dr. Stephen Zuckerman, a health economist at the Urban
Institute. "There's not a lot of utilization review or prior
authorization in Medicare," he said. "If you're doing the work, you
can expect to get paid."
As a result, doctors have steadily increased the number of procedures
they perform on Medicare beneficiaries - and thus have increased their
income from Medicare, Dr. Zuckerman said. But the extra procedures
have not helped patients' health much, he said. "I don't think there's
any real strong evidence of improvements in health status."
Private insurers like H.M.O.'s are more aggressive than Medicare in
second-guessing physicians' clinical decisions, and they will refuse
to pay for imaging scans or other expensive new procedures. Now
Medicare and private insurers are moving cautiously to change the
current system. Recently, they have proposed pay-for-performance
measures that would give doctors small bonuses if their care meets the
standards set by national medical organizations such as the American
Heart Association.
BUT all those measures are a minor fix, said Dr. Alan Garber, a
practicing internist and the director of the Center for Health Policy
at Stanford University. Instead, he argues, the United States should
move toward paying doctors fixed salaries, plus bonuses based on the
health of the patients they care for.
Even in the existing system, some health insurers, notably Kaiser
Permanente, already have large networks of salaried doctors. But it
would require doctors to give up some of their autonomy and move into
larger group practices or work directly for insurers, a step they have
been reluctant to take. About 40 percent of doctors are in single or
two-physician practices, Dr. Garber said.
Nor is the American Medical Association, which represents doctors,
eager for wholesale changes in the system, said Dr. Edward L.
Langston, chairman of the A.M.A. board.
Insurance company profits and the rising cost of preventable diseases
like diabetes are big culprits in soaring health care spending, Dr.
Langston said.
But Dr. Goldman of RAND said that doctors are misleading themselves if
they think the current system serves patients' needs.
For example, if a diabetic patient visits a doctor, he said, "the
doctor is paid to check his feet, they're paid to check his eyes;
they're not paid to make sure he goes out and exercises and really,
that may be the most important thing."
"The whole health-care system is set up to pay for services that are
rendered," he said, "when the patient, and society, is interested in
health."
http://www.nytimes.com/2007/07/29/weekinreview/29berenson.html