There has been a gradual change in health care delivery which has placed increasing financial pressures on all parties, patients, doctors and other billers for services, and payers. Where we find ourselves is a state where the health system is pressured to find more resources to pay parties more for the services they are delivering while simultaneously health care delivery is consuming a larger and larger proportion of economy.
The temptation is to look for scoundrels driving the cost side of the equation. There is no question that there are scoundrels but the truth is, all of the parties involved are to fault to some degree. We have a delivery system which has been blind to the cost side of the equation for much too long. Operating under the assumption that health care is different and that human lives are more important than money, we have been blind to the reality that there is a limit to this truth and it is a financial limit.
Health care delivery is an expensive proposition. The more expensive it becomes, the greater the financial pressures created on the parties involved. The articles from the NYT and The Atlantic highlight the difficulties created in the production model of care, incentivizing physicians primarily via production targets. (NYT) (Atlantic) As margins get squeezed for entities that are responsible for meeting payrolls and paying the bills, they have few options; increase revenues or decrease costs. As much as we might not like this situation, it is an unavoidable truth.As Megan O'Rourke says in her article in the Atlantic:
The hospitalists assured the administration negotiators that their concern had nothing to do with money — that none of this had ever been about money. They preferred to work less and make less to avoid burnout, which was bad for them and worse for patients. At which point the administration responded that money was always the issue, according to several people in the room.Until payment models are changed, physician payment will be linked to number of patients seen. However, in the absence of other measures than simply patient throughput and $'s generated, these will be the defaults. Whether quality measures can be developed which bear any real relationship to value added to patients and whether payments can be linked to actual value added (or be the driving force) is an unanswered question. The measures don't really exists for most encounters and the payments system still defaults to sheer numbers. I anticipate this will not change any time soon.
What it boils down to is the incentives are screwed up. This has implications not only for current physicians and patients but for future doctors and patients. Incentives now have impact on the decisions young people make about their careers in the future. It is no wonder that the most coveted fields in medicine are the ones that pay the highest now. For anyone who says it is not about the money, they might be right about selected people at selected points in time. However, incentives drive people and financial incentives, although they are not the only incentives, they are still the most powerful and ubiquitous incentives in place. Get them wrong and you create havoc.
How are the incentives wrong? It is hard to begin to catalog since they are screwed up at so many levels. The use of third party payers has created an administrative system setting prices which works as an accounting tool but loses all of the abilities of prices to coordinate economic activities. Third party payment has also sufficiently insulated those receiving care from the cost to create all sorts of perverse incentives. Expensive interventions adding nominal to no value to patients become standard of care, a situation which would never happen if patients had real skin in the game. There are stories of financial impact on selected patients but one thing our current system has done has been to insulate most patients sufficiently from the actual financial impact of how we operate to allow it to continue.
The production model of health care delivery is showing real strains as evidenced by the two articles I highlighted. As one of the comments from the NYT:
This is what happens when you apply a business model to healthcare. People aren't widgets. My great doctor, who spent time with patients and was a careful diagnostician, had her practice swallowed up by one of these hospitals. The last time I saw her, she apologized, but said she just couldn't making in private practice under the new business model for medicine. She was retiring early, she was broken hearted. You cannot put profits before people.However, you can put financial survival ahead of almost everything, which is exactly what is happening. Health care requires that a variety of people be incentivized to choose health care careers, get up to go to work, and decide to remain within the health care business. Get the incentives wrong and free people make rational decisions based upon the incentives in place. The doctor-patient relationship, however configured, has to make financial sense which means that physicians get paid from somewhere. I have few if any colleagues who have taken oaths of poverty. Ultimately the cost of physicians is borne by their patients, if not directly than indirectly. For a doctor who works 60 hours per week and makes $200K/year, assuming a 65% overhead, that means their patients need to pay them a minimum of $200/hour. That actually grossly under estimates the actual cost because much of the 60 hours per week devoted to patient care is billable time (time directly with the patient) under the current system. It is reasonable to assume that the cost is more like $400/hour.
However, patients are not aware that this is what the cost of their doctor is to them. They want their doctor and a relationship with their doctor, but I seriously doubt they can afford $400/hour or would be willing to pay this amount if they had to do so with their own money. So much for slow medicine. We also have to ask whether for most medical encounters it makes sense to pay this much for the value received. When one is gravely ill this cost is likely money well spent. When one is dropping in for an annual social visit, perhaps there are better ways to invest this sum of money. The almost infinite variety of other doctor patient encounters yield a spectrum of value, ranging from great deals to lighting $100 on fire.
What we are left with are different parties all looking at the situation from vastly different perspectives. From the perspective of the doctors, they see environments pressing them to work faster and faster, putting patient's health at risk, and rewarding them for quantity but not quality. If they are to maintain their compensation levels, they are pushed to compromise. From the health care administrator's perspective, they are presented with competing priorities, diminishing revenues, and increasing demands from payers and patients. In order to deliver more with less, you need to get more from current investments, meaning more patients seen per doctor. From the patient's perspective, health care consumes more and more, both in terms of insurance premiums and payments for services, and the ambiance associated with the delivery systems seems more hurried and less caring.
The truth is we are all scoundrels and victims at the same time. We all bear some degree of culpability for the mess we are in and we all have become victims of it dysfunction. For doctors, we long ignored the essential nature of being aware of how we brought value to our patients and measuring this objectively. We are playing catch up. We can't be the leaders of an industry now consuming what approaches to be 20% of GDP and not be at least nominally concerned about how to make this industry better AND more affordable. We self righteously claim that what we do is more important than profits but will accommodate to the production model of "fast" medicine to maintain our compensation. For administrators, they are now trying to claim the moral high ground pushing initiatives such as patient access and becoming patient centric. However, they fail to fully comprehend what access means. Access to what? Who are our patients? What are their needs? Are there elements of care delivery that are more important than payer mix? And then there are the patients. They are the reason that the entire enterprise exist. However, patients now enter into the health care delivery morass not understanding that there are always trade offs and that resources that are spent to further some health care goal for them are resources that won't be allocated somewhere else. Truly valuing something means being willing to spend your own resources and the current system seems to more and more intent on defining what patients value with their own resources.
The health care enterprise does truly amazing things but sustaining and expanding its reach without bankrupting the country will require that fundamental changes in how we deliver care, how we pay for care, and how we think about the goals of the care system. The articles in the Atlantic and the NYT identify the symptoms but we simply cannot set the goal to slow the system down. How a meaningful transition to something different happens within such a regulated and risk averse industry is the trillion dollar question.