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Fee-For-Service is Not the Problem

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Stephen Kemble
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What does motivate doctors?

 

Doctors are indeed motivated by financial incentives, and they do expect to achieve an income commensurate with the rigors and expense of the training necessary to do what they do. However, they are also motivated by professionalism: putting the needs of their patients first, quality improvement, and individualizing care for complex and difficult patients.

 

There are two broad ethical paradigms in the world of economics: commercial ethics and "guardian" ethics.11 The commercial paradigm assumes a seller and buyer of goods or services, whose power and interests are balanced through the marketplace and the laws of supply and demand, with financial incentives as a primary motivator. Guardian ethics are applicable to socially necessary services that require specialized training not available or achievable by the general public, so that there is an inherent imbalance of power between the provider and recipient of services. Classic examples are the military, medicine, and other specialized professions. In these cases, the interests of the public are protected by a tradition of professionalism and concern for the welfare of the public, or patient, or client, which is held to be a higher ethical value than financial considerations. 

 

There has been a movement in this country for the past 50 years to de-professionalize medicine, with an underlying assumption that commercial ethics are the only valid and trustworthy ethics. This justifies increasing interference in health care decisions by insurance plans and government, and a reliance on financial incentives to "fix" problems in health care, and especially its high cost. However, if doctors are stripped of their professional autonomy and treated as if financial considerations are paramount, they actually do start to abandon professional ethics for commercial ones. They start responding to financial considerations above patient needs; they select patients according to their insurance status; and they look for ways to game the system and make more money from things other than professional services. They begin to try to maximize income by any available means, helping drive the cost of health care higher. Sometimes this leads to outright fraud.

 

My opinion is that the real cause of much of the physician-controlled unnecessary care in the U.S. is abandonment of traditional professional ethics for commercial ethics - "medicine as a business, patients as consumers" - that when combined with fee-for-service leads to excessive and unnecessary care. If my diagnosis is correct, then the further commercialization of medical practices into competing corporate entities will only make the problem worse. 

 

On the other hand, promotion of professionalism among doctors and harnessing it to make care more cost effective through quality improvement programs is the antidote to both the incentive to over-treat under fee-for-service and to under-treat under salaried arrangements. 

 

 

Quality Improvement

 

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I am a physician with a longstanding interest in single-payer health care reform. I am a graduate of Harvard Medical School and I trained in both internal medicine and psychiatry. I am now an Assistant Professor of Medicine at the University of (more...)
 

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