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
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I think physician incentives are an excellent way to improve the quality of health care in the US. Unfortunately, while incentives already do exist today, they are not necessarily in the direction of improving the health of patients. We have already read in the NY Times that doctors are rewarded when patients experience complications. (http://www.nytimes.com/2007/05/17/business/17quality.html) Changes do need to be made that incentivize doctors to bring their patients to a heathy state, preferably in a cost effective manner.
Another perverse source of incentives is self-referral. We are finding specialists such as neurologists or orthopedic surgeons investing in high cost imaging equipment. Studies have shown that physician ownership of these facilities end up in more procedures that often do not benefit the patient. Likewise, urologists have invested in radiation therapy equipment and are now referring patients for treatment that may not be necessary or more costly than other alternatives.
The challenge to introducing new and appropriate incentives will be determining when patients are indeed better off. Measuring health states is very difficult and criteria for the diagnosis of disease can be a moving target. Based on the description of the Australian incentives in this article, I expect we may see an increase in the incidence of diabetes.
I feel like I am living in an alternate universe. Rudd announces a policy that is just a continuation of a Howard government one and gets away with saying “for the first time” and none of you call him on it.
The previous government launched the National Integrated Diabetes Program in 2002 to run for 4 years. In 2007 they announced 103 million to run programs over the following 4 years and then they lost government. So how will it go. Reasonably well it seems. The following is a description of one of the programs that had been run from an evaluation of that program.
http://www.anu.edu.au/aphcri/Publications/implementation_25%20template%20reformatted_v6withAcknowledgement.pdf
“It operates under the auspices of an Memorandum of Understanding(MOU) between these key providers and is supported by a program steering committee. The program aims to support GPs to provide a comprehensive service in accordance with Guidelines for Diabetes Management. This involves GP registration of consenting diabetics, periodic recall and review, referral to medical and allied health services and exercise physiology, transfer of patient data to the Division and feedback to the GPs of summary data and recall reminders. The program is estimated to reach around 94 per cent of all diabetics in the area. The program is managed by a Diabetes Educator, located in the Division, who provides diabetes education and is responsible for the coordination, monitoring, evaluation and development of the program. She is supported in her role by a Program Steering Committee and works closely with GPs to support them in their role providing clinical care and referral in accordance with Guidelines for Diabetes Management. Other providers include the endocrinologist, hospital, practice nurses, dieticians, podiatrists and physiotherapists as well as exercise physiology which is provided through a diabetes exercise program at the gym. In the GP practice, practice staff have a key role in data entry, recall, audit and transfer to
the Division of patient information. Practice nurses play an important role in providing patient self care education.”
Don’t know its fate in the first 3 years of the Rudd government. As standard with Rudd there is no detail available, other than more money. He even has the hide to mention podiatry and reducing hospital admissions. Hard not to conclude that his announcement relies on a compliant media, ill informed public and is merely a “Hollow Man” response to Abbott’s promise of more beds.
Some Health Actuary:
Actually I work as a data monkey for one of the few large successful multispecialty medical groups in the country. We have done well here by eliminating the middleman – Half the firm is the doctors and half is the insurance company. Decisions are made jointly.
Most of the other HMOs that I have seen are simply a contract arrangement developed by and for health insurers. “Select panels” of doctors who will accept the payments offered by insurers are paid low capitation rates usually not adjusted for risk. Consultation over rates is minimal.
Some genius in our insurance arm tried that one in the 1990′s. It did not work and we lost money and reputation on it for the reasons that you describe.
Naturally these doctors seek other patients and are drawn to patients with fee for service insurance. Naturally the decline in quality is further promoted by the pressure on capitation rates from insurers.
I would hardly say that my own group is perfect it is, however, one of the best in the business.
Hi all, I’m an Aussie who loves this blog!. I am extremely sceptical of this move to be honest. I live in a state called Queensland and we have had huge problems with doctors in hospitals, particularly those from overseas. Possibly the worst one, Jayant Patel, is currently on trial. The systematic problem triggered an Inquest called the Morris Inquiry and one of the problems that they found was that hospital funding was depenant on the number of surgeries the hospitals performed. As such doctors were pressured into performing more surgeries, and in Patel’s case completely unnecessary and harmful ones. The idea of the pay for performance was supposed to address the fact that we have HUGE public hospital waiting lists, but it just created more problems.
It could well be that in Australia we have deficient specialty care compared to the US, however our national expenditure on healthcare is much lower and our life expectancy and other indicators are better. It is insulting and wrong to characterise our health system as second world. There are certainly issues of access in very remote areas as there would be in Canada, but much of the problem in the cities is with the coordination of care as in #8.
As we all have access to free care in public hospitals, and most emergency departments are located in these public hospitals, elderly people with complex problems including diabetes, are often admitted when it may not be the most appropriate way of dealing with their problems. My mother-in-law would call the ambulance when not feeling well, hoping to be admitted to the local hospital for a rest. Since she has been settled in low level geriatric care she does not feel this need, but it was a long process involving family and specialists before she was confident that this was the best option for her welfare.
I can assure you that my friends and I constantly take our elderly parents to specialist appointments, and if Mr Rudd can come up with a way of streamlining their care we would be more than grateful, though I have to say many of the very elderly enjoy these visits which fill their day and are either free or low in cost.
Is this much different than the Bridges To Excellence Diabetes programs? There’s a lot of readily available research on the program, comparing the costs of rewarding doctors who do a better job clinically with diabetic patients.
I find it unusual in the healthcare debate that so little ink has been spilled about doctors being part of the problem instead of part of the solution. As statistics have shown, doctor salaries have outpaced general salary growth by 700% over the past 30 years. A local business weekly just published a list of doctor’s salaries at hospitals required to file such information; there were dozens making $1+ million per year and I’m guessing for every one we know about, there are hundreds we don’t. A family member of mine, who is a physician in the Midwest, makes north of $500,000 for a fairly routine specialty (and gets 10 weeks of vacation, to boot).
I totally get that physicians should earn a premium, although I don’t buy the excuse of having to fund their expensive educations (in which case the premium should simply be the cost of schooling, plus interest plus some lost income). Many doctors overtreat and specialize and cost the rest of us hundreds of billions. We could simply right the system by creating the right incentives/disincentives for physicians. Just because bad incentives caused Wall Streeters to bring down the economy doesn’t mean that the same thing has to happen in healthcare.
Second world? We have the second longest life span of any country (except Japan), and spend half of what the US does on Health? Measured at the Macro level, we’re doing pretty well.