Is There a Better Way to Pay Doctors?

It's hard to feel sorry for America's family doctors. Any job that averages $179,000 per year and lets you be your own boss is a job most folks wouldn't turn down.  With the effort to rein in health-care costs increasingly framed as an unhappy trade-off in which insurers either slash benefits or raise premiums, some in Washington are beginning to ask a question long considered off-limits: Do we simply pay doctors too much?

The truth is, we pay them all wrong.
Doctors themselves could tell you that — particularly primary-care providers (PCPs), the foot soldiers of the U.S. medical system. New doctors graduate from medical school lugging up to $200,000 in student loans. Paying that off takes a big bite out of even a low-six-figure salary. Add to that the high costs, long days and billing headaches involved in running a practice, and it's no wonder so many family docs are trading up to specialties like orthopedics, where the pay can be three times as great and the hours a whole lot shorter. Only 3 out of 10 doctors in the U.S. now are PCPs, compared with 5 out of 10 elsewhere in the world. Those family physicians who remain find themselves in a constant money chase, meeting their monthly nut with the help of the revenue they make by prescribing tests — X-rays, CT scans, EKGs — that may or may not be strictly necessary but generate a lot of separate billing.

The Need for Improved Payment Systems (Commonwealth Fund Report)

A growing number of health care professionals around the country are increasingly frustrated by health care payment systems that do not reward efforts to improve health care quality, and that often penalize them financially. There is fairly widespread agreement that one reason for high costs and quality gaps is that current health care payment systems impose significant financial penalties and offer disincentives to providers (hospitals, physicians, and others) who supply quality, efficient care (e.g., lower-cost services, higher-quality care, cognitive services, preventive care, etc.), while they offer significant incentives for providing expensive, inefficient care (e.g., invasive treatment, use of technology, etc.) irrespective of outcomes.

Paying for Care Episodes and Care Coordination (Karen Davis, NEJM)

The fee-for-service system of provider payment is increasingly viewed as an obstacle to achieving effective, coordinated, and efficient care. It rewards the overuse of services, duplication of services, use of costly specialized services, and involvement of multiple physicians in the treatment of individual patients. It does not reward the prevention of hospitalization or rehospitalization, effective control of chronic conditions, or care coordination.