Money Isn’t Everything, Even to Doctors

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Many health policy experts, including those who wrote the Affordable Care Act, believe there’s only one thing that can get doctors to change their behavior — money. A new study may blow a giant hole in that belief, just in time to save the government millions or even billions of dollars.

“Pay-For-Performance” is the theory that health care wonks believe could bring the U.S. health care system back from the financial brink. Pay for quality; compensate for competency. If we can just reward doctors when their patients stay or get healthy, we can solve a lot of what ails us systemically. Healthier patients are less expensive to care for and place less strain on the medical system. If doctors are incentivized to keep their patients from getting sick (or sicker), staggering amounts of money and time could be saved. At least that’s the theory behind some of the most experimental and innovative provisions in the new health reform law. (More on In Rural Areas, There May Be No Doctors to Tend to Your Sick Kid)

Right now, doctors don’t get paid this way. For the most part, the government (via Medicare or Medicaid) or private insurance companies pay physicians for each individual task they perform. There are no penalties or rewards if these doctors choose the wrong treatments or if a patient’s chronic disease isn’t well managed. The more treatments, surgeries, or office visits a doctor performs, the more money he or she makes.

A few years ago, the United Kingdom, in a preview of how the U.S. system could be transformed under health care reform, thought it had a way to improve quality. (Doctors who work for the NHS, a single payer system, are paid differently than in the U.S., largely via salary, but the experiment is still applicable.) Beginning in 2004, the country’s National Health Service (NHS) committed more than $3 billion toward a program to pay doctors bonuses of as much as 25% of their total income. All they had to do was meet or exceed some or all of 136 quality benchmarks that were pre-determined.

Several researchers, working at Harvard, decided to take a look at the UK program to see if they could glean any lessons about the effectiveness of Pay-For-Performance. They focused on just a few of the quality measures — those pertaining to hypertension, one of the most undertreated, expensive and common ailments known to man. What the Harvard researchers found is as startling as it is disappointing. According to their review of nearly 500,000 primary care patient records, the NHS’s Pay-For-Performance program had no effect on outcomes. Patients were not healthier than they would have been if the bonus program hadn’t existed. In other words, doctors were not motivated by financial incentives to change their behavior to benefit patients.

The lesson?

“Money by itself doesn’t buy health,” says Stephen Soumerai, a professor of population medicine at Harvard and co-author of the study, published January 26 in the British Medical Journal. “This is another example of policy makers embracing a tool because they think it makes sense — not doing pilot testing and spending billions of dollars.” (More on House Calls: A New Pediatric Model?)

Built into the Affordable Care Act are massive pockets of funding to pay for large-scale pilot projects to change the way medical providers are paid. A new Center for Innovation has already been established that will study, in part, new ways to compensate doctors to improve patient experiences and cut costs. In addition to projects that will study Pay-For-Performance, others will examine the effects of bundling, paying groups of providers based on a preset budget.

The UK study doesn’t offer suggestions of how exactly to use the lure of money to change physician behavior. All it does it issue a warning: Look, study, and analyze before you leap, or invest billions of dollars. Just because something sounds like it makes sense doesn’t mean it will work, especially in a field as complex as health care.

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