Fee-for-service is the wrong way to keep score

In today’s Globe and Mail, André Picard points out the foibles of Canada’s (mainly) fee-for-service (FFS) physician payment system.  Good points, but nothing new:

FFS is open-ended

FFS doesn’t value efficiency or cost-effectiveness

FFS creates an incentive for over-consumption/production

Alternatives to FFS carry their own baggage.  Capitation systems pay physicians a lump sum to provide all care for a group of patients.  That removes the incentive to over-treat, but there may still be gaming of the system.  Physicians may “skim the cream” by enrolling only healthy patients in their practice.  Same money, less work.  There’s also a temptation to offload patients with complicated/time-consuming conditions to specialists.

Pay-for-performance models compensate physicians when their patients achieve certain outcomes, often using surrogate measures like rates of screening mammographies or hemoglobin A1c.  There has to be reliable data collection in place, in addition to a way to disentangle the involvement of multiple care-givers.  Also, doctors may give attention to conditions whose outcomes are measured, while neglecting other problems.

Picard concludes:

There is no magic bullet waiting to be grasped, no single alternative payment scheme that will rein in health care costs.

 But there is a need to have the discussion, to experiment, to find a model that remunerates doctors fairly yet allows cost controls and improves delivery of health care to patients.

Very polite.  How about something a little more pointed…

In The Best Practice, Charles Kenney quotes George Halvorson, CEO of Kaiser Permanente, lamenting “a fundamental flaw in American health care: improperly aligned financial incentives.”:

“As a pure business model, health care is winning,” he says.  “Health care is taking all…your money and is doing it without having to be particularly accountable in how the money’s spent.  Based on that, health care will never, ever reform itself.  The model is too lucrative.”

 “There are no billing codes for cures.  There are no billing codes for outcomes.  There are no billing codes for care improvement.”

 “Providers,” he adds, “don’t do what they’re not paid to do.”

Of course, he’s talking about American medicine – things are different in Canada, right?

If we were to take André Picard up on his challenge to “experiment”, what would that experiment look like?  Maybe I’m mentally constrained by the fact that my income would be at stake in such an experiment, but I think the government/payor should be prepared to take the big risk first.  

If there is a trial of pay-for-performance, provincial medicare should totally abandon tracking volumes of service.  For most of the “alternate funding plans” (read: salaries, but don’t say it out loud because it spooks the docs) that I’m aware of, the physicians are obliged to “shadow bill”, that is, they continue to track their service volumes.  They have to do this because the health ministry thinks they will slack off if they are on salary.  And, truth be told, they might do just that. 

Which is exactly what we want!

FFS fosters over-service.  Over-service means inappropriate care and fruitless cost.  Taking away the incentive for over-service is exactly the reason for an alternate funding plan.  So, get rid of shadow billing.

But, how can we make sure the docs aren’t golfing all day?  Actually, golfing half the day would be fine, as long as the other half is spent providing appropriate, high-quality, timely, patient-centred care.  Measure it.  Report it.  

Celebrate the fact that doctors are working less, as long as they are producing the results we want.  And, for goodness sake, keep paying them the same.  It's a bargain.  Docs who are over-servicing generate tremendous downstream costs - CT scans, inappropriate surgery, unnecessary prescriptions.  Appropriate, high-quality care will be cheaper.

Perhaps we’re doing doctors a disservice by making money the sole outcome measure for their work.  If doctors seem to always have their eye on the dollar sign, maybe it’s because it’s the only target we’re giving them.  

Who has the nerve to rewrite the rules of this game?