Is Profit Ruining Health Care?

I am a semi-avid reader of the Evidence in Motion/ MyPhysicalTherapySpace blog. In a recent entry, this blog referenced an article by columnist and surgeon Atul Gawande in The New Yorker from June 1, 2009 (http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all) that discusses in length the debate in health care about rising prices, quality of service, and referral for profit.

It’s a long and interesting article, but the section I’ve included below has some poignant points as it compares a system (like Grand Junction and Mayo) that has focused their efforts on quality care first and foremost and primarily pay their health care providers a salary to a system (like McAllen, Texas) that has created a “shopping center”, profit-driven medical system that often pays based upon revenue generated.

When you look across the spectrum from Grand Junction to McAllen—and the almost threefold difference in the costs of care—you come to realize that we are witnessing a battle for the soul of American medicine. Somewhere in the United States at this moment, a patient with chest pain, or a tumor, or a cough is seeing a doctor. And the damning question we have to ask is whether the doctor is set up to meet the needs of the patient, first and foremost, or to maximize revenue.

There is no insurance system that will make the two aims match perfectly. But having a system that does so much to misalign them has proved disastrous. As economists have often pointed out, we pay doctors for quantity, not quality. As they point out less often, we also pay them as individuals, rather than as members of a team working together for their patients. Both practices have made for serious problems.

Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coordination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.

This last point is vital. Activists and policymakers spend an inordinate amount of time arguing about whether the solution to high medical costs is to have government or private insurance companies write the checks. Here’s how this whole debate goes. Advocates of a public option say government financing would save the most money by having leaner administrative costs and forcing doctors and hospitals to take lower payments than they get from private insurance. Opponents say doctors would skimp, quit, or game the system, and make us wait in line for our care; they maintain that private insurers are better at policing doctors. No, the skeptics say: all insurance companies do is reject applicants who need health care and stall on paying their bills. Then we have the economists who say that the people who should pay the doctors are the ones who use them. Have consumers pay with their own dollars, make sure that they have some “skin in the game,” and then they’ll get the care they deserve. These arguments miss the main issue. When it comes to making care better and cheaper, changing who pays the doctor will make no more difference than changing who pays the electrician. The lesson of the high-quality, low-cost communities is that someone has to be accountable for the totality of care. Otherwise, you get a system that has no brakes. You get McAllen.

Work Systems has long believed that autonomous, independent physical therapy and occupational therapy practices dedicated to providing quality services with integrity is what is best for the public. Unfortunately, we are struggling to maintain market share while competing against providers that partner with physicians who are currently capable of taking advantage of loopholes that exist in the Stark regulations. Loopholes that create a financial incentive for self-referral.

I agree with the columnist. The need for a general contractor does exist. I personally do not believe the government should play that role, but someone definitely should. What do you think?