Waiting Tables to Operating Tables

You ever wonder how your physicians are paid? The first thing an immigrant to the US complains of after agonizing over the evil exchange rate regime that forces him to spend a buck fifty on a bottle of Coca Cola when he could get three bottles for that much in his country is the fact nothing is what it appears here. Only at the register do you find out your $1.50 coke actually is $1.60 with sales tax. But what really grinds our gears in the early goings is tipping. Yup, that 15-20% gratuity that says if you do not have fourteen bucks, do not go to a restaurant for a twelve dollar meal.

Tipping is annoying because it makes an otherwise simple matter complicated; it leaves the customer to determine the waiter’s salary. Why can’t the restaurateurs pay their employees and include the cost in the price of my meal? I presume this all started in some good faith—people showing their appreciation and societal status by leaving money for good service, an admirable incentive system.

But the times it seems, have changed. Tipping is now a given. Thus, even though my cab driver offers no help with luggage and is on his phone all trip, I still give him the 20% tip to elicit his only words (thank you) to me. It got me thinking about physician reimbursement. In the traditional system, physicians and hospitals are reimbursed a specific amount for providing care for a disease or condition. There isn’t much of a measure of the quality of that care involved in the payment system. The patient is left to decide which physician is better through available ratings and some other measures of outcome like surgical complications. Critics argue there is thus little incentive to improve upon current practices. Of course most doctors are not callous and most hospitals continue to find ways of providing better care for the patient. But would financial incentives push them along faster?

Earlier in this decade, there was a lot of talk about pay for performance. It was pretty much a tipping system. You provide me with medical care; I pay you depending on the quality of that care. There was some uptake but the system had its problems. Just how do you measure the impact of a physician’s actions on a complex entity like the human being? The consensus, as it now stands, is to withhold payment if processes of care (e.g. a specific question) were not followed. This is a rather cumbersome process contributing to more paperwork for doctors and less time to spend on patients.

Getting around the measurement problem partially, Medicare, the federal health insurance program ruled it would no longer cover costs for “preventable” conditions like hospital acquired infections. This made the cost of mistakes visible to hospitals and ensured they would innovate. Of course a cynic can argue how exactly a preventable condition will be ascertained but we will leave that for another discussion. It is a positive step towards inspiring even greater commitment to quality care from care providers. But it cannot end here.

Personally, I prefer a modified process analysis approach—two levels of payments; insurers to hospitals and hospitals to physicians. On the former level, using weights based on the mix of patients, a hospital can be paid based on its overall outcomes. Hospitals can then pass these on to physicians by paying for adherence to pre-determined best practices but rewarding initiative. This is not an argument for standardized care per se but a way to reward innovation.

Physicians can vie for peer respect and financial reward by coming up with improvements (which then become best practices) to existing best practices. The problem with pay for performance is not that it is a bad idea. It is that physicians are not empowered in the system. The only people who can determine where the problems with care exist, are the people on the frontlines. By incentivizing healthcare providers to reward physician quality improvements, healthcare payers can help lower costs and improve care. Of course this whole argument is based on the premise that physicians are at least partly motivated by money. In Ghana, then, we might want to think of a move from guaranteeing all to only a percentage of doctors’ salaries.

Prime
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This is the way I choose, the destiny I pursue
To help the unfit and the fit
To treat each according to his need
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