January 28, 2013

EMPOWER THE BUYERS, DON'T PAY THE PROVIDERS:

Carrots for Doctors (BILL KELLER, 1/28/13, NY Times)

WITH its ambitious proposal to pay doctors in public hospitals based on the quality of their work -- not the number of tests they order, pills they prescribe or procedures they perform -- New York City has hopped aboard the biggest bandwagon in health care. Pay for performance, or P4P in the jargon, is embraced by right and left. It has long been the favorite egghead prescription for our absurdly overpriced, underperforming health care system. The logic seems unassailable: Reward quality, and you will get quality. Stop rewarding waste, and you will get less waste. QED! P4P!

If only it worked.

For if you spend a little time with the P4P skeptics -- a data-bearing minority among physicians and health economists -- you will come away full of doubts. In practice, pay for performance does little to improve outcomes or to control costs. [...]

Instead of leverage, P4P employs incentives. Reduce the length of stay for acute-care patients, cut the rate of readmission for pneumonia cases, make sure heart-attack victims get a talk about diet before they are discharged, and you stand to find a little windfall in your paycheck.

Critics, who have evidence from a host of pilot programs, say that the bonuses are typically too small to change behavior; New York's would be a maximum of 2.5 percent of a doctor's salary, and most P4P programs pay less than that.

The carrot has to be that the money you don't spend on health care is yours to save and or spend on useful things.
Posted by at January 28, 2013 5:21 AM
  
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