• Another real doc on the “doc fix”

    This is what I love about blogging: smart people who know things react to what I’ve written and tell me stuff. It’s a free education. This week, I’ve received a lot of good feedback on my Kaiser Health News “doc fix” column. In particular, Dr. Arnold Relman e-mailed me. With his permission, I’ve included the text of his e-mail below.

    Before I get to Dr. Relman’s comments I should note that Aaron Carroll, a policy-wise researcher and physician, had read and commented on an early draft of my column. I think it is fair to say he agrees with my policy recommendations. (He’ll let me know if I’m wrong about that.) That’s not to say they’re not above debate (nothing in the policy world is). My point in bringing it up is that I did have my ideas vetted by someone in the biz. Having said that, Aaron is not responsible for the column. I am.

    Nevertheless, Dr. Relman differs and he makes some good points.

    Dear Dr. Frakt,

    Your June 28 article on “The Medicare ‘Doc Fix’: How to Make Political Lemonade” correctly identifies the problem with Medicare payment of physicians, but makes a serious mistake in suggesting a solution. Basing payment on “quality improvement” sounds OK in theory, but won’t work in practice because there is no way to measure the “quality” of medical services that is applicable to the broad range of physician services or—even in limited cases—is generally accepted as valid. Attempts to “pay for quality” will inevitably lead to controversy and evasions. And sometimes it will cause physicians to avoid complicated and difficult cases. Risk adjustment won’t work either, because it is a technique built on sand, always subject to dispute and variation.

    Paying specialists less isn’t a good solution either because—as you clearly understand—the specialists will use volume to protect their income, and will use more expensive procedures.

    The only sensible way to control rising costs is to change fee-for-service to payment by salary, and to persuade physicians to organize themselves into not-for-profit, multi-specialty group practices.

    I explain this all in my 2007 book “A Second Opinion”, which has just been re-issued in paperback, with a new update. (Public Affairs, NYC)

    I hope you will read it.

    Arnold S. Relman, M.D.
    Professor Emeritus of Medicine and Social Medicine, Harvard Medical School
    Former Editor, New England Journal of Medicine

    I do hope to read Dr. Relman’s book. When I do I’ll have much more to say about his health policy ideas. For now, I’ll just note that I agree with him that salaried physicians working in non-profit, multidisciplinary groups would make a huge dent in health costs. It’s the VA model, and it delivers good results for a lot less money.

    However, we’re not moving to such a model everywhere for all doctors very quickly. When I make policy recommendations, I like to propose smaller, more feasible steps that have a prayer of being considered in the near term. It is always possible that in striving for such modest proposals I end up suggesting things that won’t do much good. That’s debatable. I’ll neither concede that my ideas are worthless nor puff myself up with false confidence that they’re pure gold. This is worth more thought, and I will give it that. In the meantime, I’m grateful for Dr. Relman’s feedback and all the rest I receive from other readers.

    • “The only sensible way to control rising costs is to change fee-for-service to payment by salary, and to persuade physicians to organize themselves into not-for-profit, multi-specialty group practices.”

      Assume a can opener.

      More seriously, we went through a phase of our hospital employing physicians and buying practices in the late 80s, early 90s. It quickly went away when the productivity of the hired/bought physicians dropped a lot. The hospital is now employing more docs again, but is trying to build in work incentives, with mixed but mostly positive results.

      For those of us who trained in the 80s, the VA was generally considered an inefficient system with mediocre results (I am being generous here). It would be interesting to see what they did to change that. I hope that you are aware that the VA has poor legacy from those years.

      From the government POV, Dr, Relman may be correct. What I have assumed over the last couple of years, is that eventually payers with the oomph to do so will tell hospitals that they will give them X number of dollars to get a given procedure done. It will be up to the hospital to decide how to divvy up that money. It would get the government out of having to directly negotiate. It would put the onus on docs, and the hospital, to determine among themselves whom should get what. The easiest way to do that, if I am a hospital, is to employ salaried docs.

      This would leave PCPs out of the hospital employed. You could then still shift monies to them from the procedurally oriented specialties. Then, solve imaging costs and you are golden. 🙂