Victor Fuchs’ answer to the doctor’s dilemma

In NEJM, Victor Fuchs asks of doctors, “How can a commitment to cost-effective care be reconciled with a fundamental principle of primacy of patient welfare?” As demonstrated by Hennig-Schmidt and colleagues, money has a way of distorting incentives away from either cost-effective care or patient welfare. Physicians like to get paid and get paid well, as do all of us. Fuchs’ dilemma is, as they say around here, wicked hard.

Yet, to his credit, Fuchs provides an answer,

[I]f the physician is practicing in a setting that has accepted responsibility for the health of a defined population and the organization receives an annual fee per enrollee, the chances of the physician’s practicing cost effective medicine are substantially increased […]. The physician’s colleagues are practicing the same way, and the resources saved can be used for the benefit of the defined population, which includes the physician’s patient. In Canada, which has universal insurance, per capita spending on health care is only 55% of the U.S. level because there is a limited overall budget, and all physicians in the system recognize the need for prudence in making decisions about care.

In short, when physicians are collectively caring for a defined population within a fixed annual budget, it is easier for the individual physician to resolve the dilemma in favor of cost-effective medicine.

Without saying so, Fuchs defined an ACO on steroids, one that cares for a defined population but within a global budget. Though it is by no means certain, it’s a reasonable bet that something quite like that is in our future, not just for Medicare, but for all of us. Will it resolve the dilemma Fuchs raised? Only if physicians don’t follow the obvious financial incentives to provide less than optimal care, particularly for those that need the most.

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