Freeing the Doctor
By John C. Goodman • Thursday September 6, 2012 4:34 PM PDT • 6 Comments
The case for liberating physicians from the dictates of third-party payers
Of all the people in the healthcare system, none is more central than the physician. As I explain in my book Priceless: Curing the Healthcare Crisis, fundamental reform that lowers costs, raises quality, and improves access to care is almost inconceivable without physicians leading and directing the changes. Yet of all the actors in modern healthcare, none are more trapped than our nation’s doctors. Let’s consider just a few of the ways your doctor is constrained, unlike any other professional.[1]
Sometime in the early part of the last century, all the other professionals in our society—lawyers, accountants, architects, engineers, and so on—discovered the telephone. It’s a handy device. Ideal for communicating with clients. Yet, telephone consultations are not on Medicare’s list of about 7,500 tasks it pays physicians to perform. (At least, it’s not there in a way that makes telephone consultations practical.) Private insurance tends to pay the way Medicare pays. So do most employers.
Sometime toward the end of the last century, all the other professionals discovered email. In some ways, it’s even better than the phone. But reading and responding to emails doesn’t make Medicare’s list in a practical way, either.[2]
At a time when doctors feel that third-party payers are squeezing their fees from every direction, most are going to try to minimize their non-billable time. Because patients cannot conveniently use modern media to consult with physicians, they make unnecessary office visits. The result is more rationing by waiting at the doctor’s office, which imposes disproportionate costs on chronic patients who need more contact with physicians. This might be one reason why so many are not getting what they most need from primary care physicians and what is most likely to prevent more costly problems later on: prescription drugs.[3]
The ability to consult with doctors by phone or email could be a boon to chronic care. Face-to-face meetings with physicians would be less frequent, especially if patients learned how to monitor their own conditions and manage their own care.
Other doctor tasks that might be helpful—but are not compensated by Medicare and other insurers—are providing advice about the cost of brand-name drugs versus generic and therapeutic substitutes as well as over-the-counter alternatives. Information about comparative prices and how patients can save money through smart shopping would be a valuable service, and who would be in a better position to provide it than the physician? In addition, numerous studies have shown that chronic patients—people with diabetes or asthma, for example—can often manage their own care, with lower costs and as good or better health outcomes than with traditional care, reducing the number of trips they make to the emergency room. ER doctors could save themselves and future doctors a lot of additional time and trouble if they took the time to educate the mother of a diabetic or asthmatic child about how to monitor and manage the child’s healthcare. But time spent on such education is generally not billable.
What is the common denominator for all of these problems? Unlike other professionals, doctors are not free to repackage and reprice their services in ways they believe will best help their patients. Instead, third-party payer bureaucracies tell them what tasks they will get paid for performing and how much they will be paid to charge. Doctors are the least free of any professional we deal with. Yet these unfree actors are directing one-fifth of all consumer spending.
By now readers will be familiar with what I regard as the essential way out of this trap: Medicare should be willing to pay for innovative improvements that save taxpayers money. And doctors and hospitals should be able to repackage and reprice their services (the way other professionals do), provided that the total cost to government does not increase and the quality of care does not decrease. This change in Medicare would almost certainly be followed by similar changes in the private sector.
[1] John C. Goodman, “What’s Wrong with the Way We Pay Doctors?” John Goodman’s Health Policy Blog, December 2009.
[2] About 34 percent of physicians email their patients. Wall Street Journal Staff, “Vote: Should Physicians Use Email to Communicate With Patients?” Wall Street Journal Health Blog, January 10, 2012. These are usually messages alerting the patient about an appointment or other notification. Email consultations are rare.
[3] John C.Goodman,“Time, Money, and the Market for Drugs,” in Innovation and the Pharmaceutical Industry: Critical Reflections on the Values of Profit, eds. H. Tristram Engelhardt, Jr. and Jeremy Garrett (Salem, MA: M & M Scrivener Press, 2008), 153–183.
[Cross-posted from Psychology Today.]
Tags: Economics, Free Market, Healthcare, Insurance, Medicare, Regulation, Taxation, Welfare 
“... fundamental reform that lowers costs, raises quality, and improves access to care is almost inconceivable without physicians leading and directing the changes...”
I agree that reform of health care is needed, and that establishing a health care free market is necessary for successful reforms. But, I disagree that today’s physicians will lead us to high quality, cost-effective care. Most practicing physicians lack the knowledge, skills, and mind-set to improve care. Most were poorly educated and poorly trained. Many view medicine as a trade instead of a profession requiring extensive and continual education. I could spend pages discussing the failures of K-12, college, and medical school education; the wrong-headed approaches to learning medicine during residencies and fellowships; and the willful disregard by most medical students and physicians-in-training towards proper mastery of relevant subjects. I’ll summarize by noting that most physicians do not remember human biochemistry, physiology, and pathology. They get by in their practices not by thoroughly understanding the human body and its diseases, but by using memorized patterns of signs, symptoms, exam findings, and lab test results. A patient who presents with a problem that doesn’t fit a memorized pattern will suffer from misdiagnosis or delayed diagnosis, incorrect (and probably harmful) therapy, and a multiplicity of costly diagnostic procedures and referrals to specialists.
Getting to high quality health care from our current system will require much more than a free market. It will require an influx of properly educated physicians (perhaps from other nations) who will do so much better than their colleagues that many patients will recognize the improved quality and seek out such physicians.
MingoV | Sep 7, 2012 | Reply
I agree with your conclusion. I will however add that a lot of time the physician is in too great a hurry to render a diagnosis and move on to the next patient. In my case, a medication I was prescribed at the maximum allowed dosage caused a decline in my red cell count. As neither my primary care doctor or my specialist (a gastroenterologist)could determine the source of the problem, some rather expensive tests were made with inconclusive results. The next step was to see a cancer doctor since it was thought I might have cancer of the bone marrow. At this point I used “Google” to find the full list of possible side effects from the medication I was on. The one I’d been prescribed for ulcerative colitis was the one responsible for the drop in red cell count. As both doctors knew the medications I was on, it appears that neither one bothered to check for possible side effects. This convinces me that a lot of people likely undergo expensive tests and such simply because the doctor doesn’t bother to check for side effects from medications. If it was money out of their own pockets I’m sure they’d be more careful, but since they are spending “other people’s money” they tend not to concern themselves with costs.
Jerome Bigge | Sep 10, 2012 | Reply
Jerome, As John Goodman discusses in his book Priceless; Curing the Healthcare Crisis, caregivers have and can behave in such non-responsive ways as a direct result of the current third-party payer system in which no one knows what the real prices of health services are and caregivers are hence shielded from being accountable to those being served (health customers). As you well suggest, changing the incentives to a market-based system is essential.
David J. Theroux | Sep 10, 2012 | Reply
I would tend to agree with Mingo’s comment.
Additionally, I find it bizarre that MD’s should demand payment for phone calls and e-mails to patients. They are paid for patient care, if it works by e-mail/phone, fine. Individual billing for this is more bureaucracy.
The true failing of the pieces of this book I have read, and I have not read much, is it’s more like rearranging the deck chairs on the Titanic. Where is natural medicine/nutritional medicine/functional medicine in all this? THIS IS WHERE THE REAL COST SAVINGS COME FROM–healing/curing with 1/10th the cost for many/most problems.
(See: http://www.vitamindcoucil.org and search “the many guises of vitamin d deficiency” Read the blog comment and the response to it to see the difference.)
If doctors are unable to practice root cause medicine, maybe they should seek other employment. Emergency/trauma care, diagnostics and surgery if you actually need it are areas in which modern medicine excels. The rest is usually very expensive and mostly useless.
How about Medicaid providing health savings accounts, on a voluntary basis, and Medicare the same for indigent recipients? Of course, these have to be available for any care a client chooses, including dental care and nutritional supplements and other “unapproved” methods. Imagine, poor people being able to get their teeth fixed. With teeth fixed, it might even be easier for them to find jobs.
We don’t need more billable items, we need more cash payments and bigger deductibles.
Janice | Sep 11, 2012 | Reply