While partisan rancor over health care continues in the U.S., Australia is forging its own health care path. Its government, hoping to encourage doctors to treat diabetics outside the hospital, announced that doctors will be given a cash payment for every diabetic they treat, and an additional payment for patients whose health improves. Prime Minister Kevin Rudd outlined the strain that diabetics place on Australia’s health care system: “In 2007-08, around 237,000 hospital admissions were related to complications from diabetes that could have been avoided through better management. This is 32 per cent of all avoidable hospital admissions.” The pay-for-performance nature of this program is evident — but so too is the potential for abuse. How do you think it will play out? (HT: Chris McCracken) [%comments]
Giving Doctors an Incentive
TAGS: healthcare
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As a physician working in the USA, I know that Australia has deficient specialty care compared to USA without the access to newer equipment. For us to be comparing our health care to the rest of the world is a sign of our healthcare system becoming second rate although accessible to all. Obviously Australia is trying free market solutions to its healthcare problems, albeit too late.
Welcome to 2nd world America!
They are just changing where doctors are going to allocate resources. Obivously diabetics are untreated now because they aren’t a smart use of time for doctors, maybe the incentive will change that, but that owuld have to be at the expense of another group’s healthcare.
What they are really facing is a doctor shortage, and will this small increase in pay help bring more people into the profession? It is unlikely unless the cash payouts are substaintial.
It might help but this is way too narrow. What about people who are prediabetic or have high blood pressure and so on. Also it is virtually impossible for one doctor to take over the coordinated care of someone with a complex chronic illness.
Why not just pay multispecialty medical groups fixed annual fees to provide comprehensive health care to individuals? The annual payment could be adjusted to account for risk of disease.
That means that we are paying for what we really want and need, health, and not for treatments. Also the doctors’s incentives are aligned with our own. They do best when they give us quality, inexpensive care.
I’m just full of ideas:
http://wonksanonymous.com/2009/10/19/why-the-blog-has-been-sparse.aspx
Have you read Drive? I suspect it depends on how “routine” it is to treat diabetes is.
@xdr – this is slightly unrelated to the original post, but I know several doctors in Canada who explain the difference in specialities and equipement as having more to do with smaller populations than with health care systems. If your countrie has a significantly smaller population than the United States, the it’s hard to have enough people in a given geographic area needing a specific specialist, so doctors have to be generalists in order to have a large enough patient pool. I would be curious to know if Austrialian doctors have similar issues.
As far as the original post, I’m all for cash incentives to doctors that perform by keeping their patients healthy, but I’m concerned about the possible unintended consequences – will seriously ill diabetics be able to find a doctor who is not too busy treating those that are capable of staying out of the hospital, and will other, less profitable diseases, be able to get the same treatment as diabetics? I don’t know the answer, but I’d be curious to see if others have suggestions.
The UK’s NHS has been doing a version of this since 2004. See http://www.qof.ic.nhs.uk/ and http://www.nice.org.uk/aboutnice/qof/qof.jsp
@Wonks Anonymous
“Why not just pay multispecialty medical groups fixed annual fees to provide comprehensive health care to individuals? The annual payment could be adjusted to account for risk of disease.”
I worked in the pricing department of one of the biggest insurers in Massachusetts , and have experience with what you are describing. Let me assure you that this has been tried (it was called “capitation payments”) and failed because the doctors became incentivized to offer fewer services than needed.
One reason for high cost of medical care is overuse of specialized services and underuse of preventative services. A great way to fix that is paying for performance (something along the lines of what Australia is attempting to do), but it is extremely hard to come up with exact metrics to measure performance against, especially in a diverse, medical environment.
#3 — It’s a myth that “one doctor” cannot coordinate care of someone with a complex chronic illness. That is the role of an internist. 20-30 years ago, the smartest minds in medicine specialized in internal medicine for this very reason. Why not now? The problem is that sort of care is not in the least bit lucrative for one doctor to perform given current compensation models. Instead, what Americans get is the cardiologist (or hypertension specialist) managing blood pressure, the endocrinologist managing diabetes, etc. Less problems to deal with per visit = shorter visit = more patients per hour = happy, rich specialists, but Medicare/private insurance ends up paying for visits to the PCP, cardiologist and endocrinologist instead of just the PCP. As an ER physician, I can’t keep track of the number of patients I’ve seen who present with problems relating to having uncoordinated care — a good example is the patient whose gastroenterologist stops the patient’s Plavix for a low-yield, high-paying endoscopy, causing a heart attack.
Several of the problems with America’s health system would be solved if internists/PCP’s were properly compensated for this sort of complex care. You can take the money away from the specialists to pay for it. This would have a bonus effect of decreasing the number of specialists. At my hospital, not one of the recent internal medicine graduates is sticking with primary care — they are all doing a fellowship. A smart PCP can manage most cases of hypertension, diabetes, hyperlipidemia and various other chronic diseases, even when they are all in the same patient.