It's The Doctors, Stupid
Steve Pearlstein's column today focuses on one of my favorite topics in health reform: The centrality of doctors. They, after all, are the ones making most of the decisions in the health-care system. Consumers outsource their thinking to their doctor, and always will. (The job of the doctor is literally to provide medical information to, and guide the medical decisions of, her patients.) That's why pharmaceutical companies focus their persuasion efforts on doctors and device manufacturers spend all that money sending branded pens to doctors. It's possible that you can reduce aggregate heath-care costs by making it harder for individuals to purchase health care. But the only way you can change aggregate health-care decisions is by changing the incentives of doctors.
That, however, doesn't get talked about very much, or very loudly. It's one of the dysfunctions of the health reform debate that the attention different actors get is related more to their unpopularity than to their actual impact on the system. Insurers, for instance, are likely to get a lot of new regulations, as they're very unpopular. But those regulations aren't likely to do that much to achieve the administration's primary objective of cutting costs.
Doctors, conversely, aren't going to see that many changes, because they're very popular. But reforms to, say, the way doctors are paid would actually do much to change the drivers of health-care spending. In particular, most doctors are paid on a fee-for-service model. Every time they do something to you, they get money for it. That's a subtle incentive toward expensive overtreatment. Conversely, if we paid doctors exactly the same amount overall, but made that money a yearly salary rather than a reward for volume of treatment, doctors would lose an important incentive to provide more health-care services than we actually need.
And since all health-care-related commentary must now, by law, include a reference to Atul Gawande's definitive piece on health-care spending, I'd just note that insurers barely appear in his article at all. He bases the bulk of his analysis around the incentives and decisions of doctors. And he's right to do so.
June 10, 2009; 5:00 PM ET
Categories: Health Reform
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