A must for health care reform: End fee-for-service medicine

It's often stated that rising costs result from the public's overconsumption of health treatments. When insurance pays for care, patients want to run every test and take every pill.

This belief leads some reformers to push for measures – such as high deductibles and copayments, or plans that cover only catastrophic care – that would force consumers to bear more of the burden of health costs.

But when it comes to big decisions about care, doctors, more so than patients, tend to call the shots. No matter how your health plan is designed to affect your decisionmaking, it is the healthcare providers who decide what treatment you need. And the more they do, the more they are paid.

How incentives distort care

There is no consequence to and little effort required of providers if they order extra and unnecessary tests – even harmful ones. But to do only what is necessary requires the use of valuable time and effort: to think through each decision carefully, to reassure the patient, to read the latest literature, and to spend extra time documenting decisions so as to decrease malpractice risk.

Therefore, as providers make decisions to use resources, the pressures on them to maximize their income and to use as little time as possible push them to do more, even if the care is unnecessary or of vanishingly low value.

Only by changing these pressures – by reforming payment systems and not just insurance – can we hope to control costs.

Yet this crucial aspect of reform – pay for providers – is not a serious part of today's discussion in Congress.

Historically, insurance companies have not done well at controlling costs. When they had their chance in the 1990s, they did it with payment discounting and by seeking healthier patients, but they did not seek to change the way they paid providers and thus did little to decrease unnecessary care or increase the value of the care given. They managed prices, not cost, and certainly not care.

We will need government intervention to require payment structures that promote quality, not just quantity.

Tackle access before costs

As was the case in Massachusetts, the nation may need to tackle access before it can take on costs. It may be politically unfeasible to propose even rational mechanisms to restrain use of care when we do not yet have structures to guarantee basic care to so many.

Until government has a framework for making sure there is a functioning insurance system, it will not have the leverage over that system to demand the payment reforms needed to control cost. So be it. We can live with fixing access now and costs soon – but let's make sure we are clear and honest about what we are and are not doing – so we know what to expect and what work remains.

Anthony L. Schlaff, MD, MPH, is director of the Master in Public Health Program at Tufts University School of Medicine. His opinions are his own.

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