Sunday, October 4, 2009

Is Fee-For-Service the Reason for Our Excessive Health Care Spending?

The evidence is overwhelming that we, as a nation, do not practice efficient medicine. We spend about twice as much per person as any other country yet have many millions without adequate health care. It is becoming obvious that physician practices are a major component of this excess spending. Many experts refer to the non fee-for-service centers such as The Mayo Clinic, The Cleveland Clinic, The Geisinger Clinic and others as examples of efficiency and state that fee-for-service medicine is the major driving force for our excessively expensive medical care.

I do not doubt that fee-for-service is a component of this problem, but are there other factors that are equally if not more important? After all, The Dartmouth Atlas of Health Care has demonstrated that many areas with large university medical centers with medical staffs on salary spend much larger amounts for the same conditions than the most efficient centers. And where are the big physician profits in medicine, in professional fees, i.e. Medicare part B or in facility fees, i.e. Medicare part A? There is no doubt that the big profits come from ownership and not professional fees. Thus many question the propriety of physicians profiting from facilities to which they refer patients. This has nothing to do with fee-for-service. Other factors include:

1) The mistaken belief by many that limiting non-beneficial care is rationing.
2) A fascination for glitzy buildings and fancy machines, leading to real excess.
3) Public demand heightened by drug and device advertising via the mass media.
4) A Medicare payment system that emphasizes expensive machinery at the expense of person to person patient-physician time.
5) Organized medicine’s inability to articulate to the public:
a) what is rational health care?
b) the importance of history and physical diagnostic skills of physicians, skills that are now being de-emphasized in favor of various expensive tests.
c) lack of a concerted effort to promote a more equitable and realistic tort system.

Thus, although fee-for-service may entice some, if not many, physicians to do something extra, it is only part of a much more complex problem. The culture of intensive peer review at The Mayo Clinic and the other efficient medical centers may indeed be the secret of their success, rather than the lack of fee-for-service.