In a misguided effort to solve health care funding problems, many politicians and bureaucrats are attempting to pay health care professionals not for the work they do, but for the work they don’t do.
Sounds unbelievable? The rationale for this colossally unimaginative plan is that some professionals order too many unnecessary tests, and perform unnecessary procedures in order to get paid more. This drives up health care costs.
Therefore, the idea is to pay professionals a lump sum to treat a certain diagnostic condition. If they use less of the allotted funds, they can keep the extra as profit. If they use more of the funds by doing more treatment, they take a loss.
This model, called “capitated care,” generally does not work when you look at quality and benefits to patients. It does help with insurance profits.
The major problem is that the financial incentive is to undertreat patients. Professionals generate profit by doing fewer procedures or less treatment. When there is a question of whether to do a procedure, the incentive is to not do it. Patients stand to lose out.
Fortunately, some professionals will do what they feel is best treatment regardless of finances. They should be recognized and saluted. Ask your own doctor.
The other problematic incentive is for the professional to treat simple cases and avoid difficult, uncooperative patients because they will show less progress and reduce profit.
Ivan Miller, a psychologist who has worked on health care funding for nearly 20 years, has created a far more imaginative, robust and nuanced model. See www.ivanjmiller.com/balanced_choice.html. This model addresses the needs of consumers, professionals and business owners, and could well be integrated into states’ plans.