When You Give Doctors Incentives To Get It Right, Rather Than To 'Do Everything', People Get Better Care For Less
from the economics-in-action dept
One of the biggest problems in trying to fix our insane and out of control healthcare system is the fact that the entire system has totally screwed up economics. The incentive structures are a disaster. The deeper you look at healthcare economics, the more horrific it is. Now, there are some very legitimate reasons how it ended up this way, because there’s a strong argument that a purely “free market” healthcare system leads to very poor healthcare for many people who cannot afford it, and that basic healthcare is something that should be provided much more widely both because of basic human compassion and common sense, but also because there are carryover effects to an unhealthy population that effect us all broadly.
But, when you set up a system that has the incentives totally screwed up, what you end up with is what we have: a system where everything is insanely expensive for no other reason than it can be, and where the quality of healthcare is simply not that good, because there’s no incentive to make it that way. Instead, there’s incentives to simply add up bills as high as possible, with doctors ordering every test imaginable, and focusing on doing more, not doing what’s best.
The folks over at Planet Money have an interesting podcast about some pilot programs that have come about because of Obamacare, that seek to realign the basic incentives of doctors to treat patients in the best way, rather than piling as many charges on them as possible. No matter what you think about everything else in Obamacare, it seems like these little-discussed pilot programs are an unquestionable step in the right direction.
In the Planet Money podcast, they talk about one simple way that the pilot program is having an almost immediate effect: by paying doctors a lump sum for overall treatment of a condition, and actually dinging them for errors, rather than rewarding them by allowing them to add more fees for fixing those problems, significantly fewer problems occur. The program also goes further in including the shocking idea of giving doctors feedback on how they’re doing, using actual data, rather than letting them do whatever they want without consequences.
In theory, you’d hope that doctors are always seeking to do what’s best for the patients, rather than what earns the most money, but it seems clear in practice that when doctors are given a little incentive to do their job better, rather than just do more, they actually do, in fact, do their job better, meaning that not only are people healthier, but the cost of the healthcare goes down. More of that, please.