Liberating the Doctors! What a catchy title, but who knew they needed liberation? The doctors, that’s who.
John C. Goodman is the founder of the Goodman Institute which specialize in public healthcare policy. Goodman is a healthcare economist who has written extensively on the problems in healthcare public policy and now he says it’s time to liberate the doctors.
Goodman says, “For almost half a century, this country has been seriously engaged in efforts to reform our health care system to reduce costs, improve quality and expand access to care. Participants in the effort have included politicians representing all points of view in Congress and in state legislatures, bureaucrats of all stripes and varieties, business executives, labor leaders, insurance company reps, hospital execs, academic health economists and a slew of nonprofit foundations. The one group that has been noticeably absent from these discussions are the doctors who actually deliver care. That’s not an accident. Everyone else has decided that doctors are the problem, not the solution. They don’t practice medicine the right way; they don’t bill the right way; they don’t keep medical records the right way; etc., etc.”
Ironic, isn’t it. You wouldn’t consider asking a politician how to treat your diabetes or give you a hip replacement, but everyone thinks the politicians should know how best to deliver healthcare. Doctors are not necessarily the finest businessmen and women, but they do know better than most about healthcare delivery. It’s time they were included in the conversation!
Goodman goes on: “That’s why virtually every solution that has been tried involves people who don’t practice medicine telling the doctors who do practice medicine how to manage their affairs. And none of these solutions appears to work. Costs keep rising. Quality of care is not measurably improving. And, access to care (as measured, say, by per-capita doctor visits or the length of time needed to see a doctor) seems to be getting worse. So why not try something different? Why not allow the folks who practice medicine and who are in the best position to eliminate waste, improve quality and expand access to care to solve the very problems no one else seems able to solve?
He says for that effort to be successful, we need to follow four principles:
Give doctors the freedom to repackage and reprice their services.
Doctors are the only professionals in our society who do not have the freedom to repackage and reprice the services they offer in the marketplace. All the other professionals – lawyers, accountants, architects, engineers, etc. – are free to change the services they offer and the fees they charge whenever technology changes, whenever science changes or whenever there is a change in customer preferences.
Currently, there are 10,000 tasks that Medicare pays doctors to do. If there is a service that a patient needs that is not on the list, the doctor doesn’t get paid anything. If the service is on the list, the doctor only gets paid Medicare’s fixed price. There is no negotiation of these prices. The doctor has to take it or leave it. Large private insurance companies tend to pay the same way Medicare pays – using the same list. Their rates tend to be a percentage of what Medicare pays (e.g., 150 percent), and again there is no negotiation. It’s take it or leave it.
No other professional is paid this way, and for good reason. Imagine you were charged with a crime and an outside entity set the fees your lawyer gets for different tasks. Just to make up an example, suppose the lawyer gets paid $50 an hour for jury selection and $500 an hour for preparing a final summation of your case. You might get a really excellent summation at the end of your trial – one that would ordinarily get you off scott free – but (unfortunately for you) it’s delivered to the wrong jury!
Even worse than mispricing is the presumption that anyone could think of everything a professional might do to help a customer and then put it on a written list. Until the Covid pandemic, for example, consultations by phone, email, Zoom Skype, etc., were not even on the list of services Medicare paid for – except in rare circumstances.
Encourage supply-side innovation.
How do we know that practicing doctors could improve on the current system? Because that is what happens whenever they provide services outside the third-party payer system. In the fields of cosmetic and Lasik surgery, for example, we see transparent package prices that have declined in real terms over the last two decades – even as the cost of every other type of surgery kept on rising. Further, this happened even as there was a huge increase in demand and all manner of technological changes – which we are told raise costs everywhere else in medicine.
Direct Primary Care (DPC) is another example. DPC doctors provide all primary care for reasonable monthly fees (say, $50 a month for a mother and $10 for her child) and patients are usually able to reach their doctor by phone at nights and on weekends as an alternative to visiting the emergency room. There are endless possibilities here. Giving doctors freedom to offer different services to the market for different prices not only promises less expensive, higher quality care, it should be the goal of any responsible health reform.
Note: To learn the other two principles, stay tuned for my next blog post.
