In a 12/12 post, we talked about the growing, new controversy regarding Pay for Performance incentives to encourage doctors and hospitals to provide higher quality care. Democrats such as Rep. Pete Stark, conservatives at the Heritage Foundation, and others take issue with new approach for a variety of reasons.
Yesterday’s New York Times has a good piece describing why these incentives can be helpful and why we should not just rely on physicians and hospitals to “heal thyself.” Excerpt:
Consider chronically ill elderly patients in the last two years of their lives. According to a comparison of hospitals across the country done by researchers at Dartmouth, if the patients die in a hospital in New York State, the average cost of those two years would be $38,369. In Florida, by contrast, it would be $29,604, while in Iowa it would be only $23,746.
To be sure, much spending on health care provides enormous benefits. A study published this year by Mr. Skinner, Mr. Staiger and Dr. Elliott S. Fisher of Dartmouth Medical School found that Medicare spending on hospital care for heart attack victims surged two-thirds from 1986 to 1996, after accounting for inflation. But the percentage of victims who were alive a year after their attacks also increased, though by just 10 percentage points, to roughly 68 percent.
The relationship — rising costs bringing increased benefits — has broken down recently. From 1996 to 2002, Medicare spending on treatments for heart attack victims increased about 14 percent, after inflation. But there was virtually no improvement in survival rates.
There is mounting evidence that the zeal to treat and spend may actually hurt patients. The study by Mr. Skinner, Mr. Staiger and Dr. Fisher found that hospitals in regions where spending grew fastest from 1986 to 2002 had some of the worst practices, in terms of providing tried-and-true therapies, and recorded the smallest gains in survival rates.
There is a reasonable argument about whether you should pay providers more for doing things right or readjust the base, paying those who do it right more and those who do it wrong less. That’s a legitimate disagreement. What’s not legit is suggesting the incentives do not have to be reconfigured.
There are two issues here. One is the general desire to reduce the amount of ineffective care, i.e. underuse, overuse, misuse, and waste. The other is decide when care should be withheld because the odds do not demonstrate that it will efficacious in a particular case, i.e., your parent or grandparent who is elderly and might not respond to treatment.
I think the difficult societal issue is how we take the general goal — on which we all agree — and telescope it down to the individual case when the family insists on pursuing all possible options. In these cases, I generally do not see a zeal to treat and spend originating from doctors: It is often sought by the patients and families.
I am not naively saying it never originates from the other side of the bed; but I have seen many cases in which a family makes a treatment decision for an elderly relative, influenced at least part by the fact that the costs will be paid by Medicare and not by them. That is a major form of incentive itself.