How Should Physicians Be Paid? Nobody Agrees

Does changing the way physicians are paid hold the key to effective healthcare reform? The New York Times held an online roundtable discussion on this topic, engaging a wide range of thought leaders, most of them physicians. Their widely varying responses show how little agreement there is on this topic, even as Congressional leaders try to craft reform legislation.

Elliott Fisher, director of the Center for Health Policy Research at Dartmouth Medical School, notes that his research shows that Medicare spending might drop by 30 percent if all doctors practiced as cost-effectively as those in lower-cost regions. But he says it would be pointless to reduce Medicare payment rates in high-cost regions, because physicians would just perform more services to make up for it. The solution, in his view, is to build more organized systems of care, give doctors more quality incentives, and allow them to share in savings. The solution du jour, this combination is designed to encourage physicians to reduce utilization of services while providing appropriate care.

Kevin Pho, a primary-care doctor who blogs at the well-known KevinMD site, doesn’t think physicians should be forced to regard medicine as a business. Instead, the system should be structured so they can make a living—and, presumably, a good one—by just practicing high-quality medicine and spending a lot of time with patients, both in the office and online. Nice work if you can get it, Kevin.

Harvard Medical School professors Steffie Woolhandler and David Himmelstein, cofounders of Physicians for a National Health Program, are the single-payer advocates on the panel. They point to the Canadian system as proof that financial incentives for physicians aren’t necessary to control the cost of care; but, of course, the Canadian provinces budget a certain amount for health care, and all hospital and physician spending must come out of that budget. Woolhandler and Himmelstein’s single payer proposal, similarly, would impose a global budget on U.S. providers and leave it to them to figure out how to provide high-quality care to everyone. Good luck with that. They are right on one point, however: the public plan advocated by Democrats would just emulate the bad behavior of private insurers without lowering costs.

Cardiologist J. James Rohack, president of the American Medical Association, says the AMA wants the reform legislation to embrace “alternative payment methods” that foster coordination among physicians. One example of that is the “patient-centered medical home,” which the AMA has endorsed. But the association doesn’t like the idea of shifting some Medicare payments from specialists to primary-care doctors–a prerequisite if the medical home is to be budget-neutral.

The other essays—written by organ transplant specialist Clive Callender, ER doctor and author Liam Yore, and Grace Marie Turner, president of the Galen Institute—take a variety of positions. Callendar has experienced payment bundling, and he likes it. He wants more incentives for physicians to work as part of care teams. Yore favors a shift of payments away from procedural specialties—something Medicare has long tried to do, with little success. And Turner believes we have to focus on increasing patient engagement in their own care, which she says health plans are already doing successfully. Question is, if they’re so successful, why can’t they control costs better than Medicare does?

What this roundtable shows is that Congressional reformers—most of whom have far less expertise than the writers of these essays—face a huge challenge in deciding how to reimburse physicians fairly while saving Medicare and the rest of the system. Handing off the tough decisions to the Medicare Payment Advisory Commission might make sense politically; but in the long run, our leaders are going to have to level with the public and make some of the hard choices themselves.