The Cost Conundrum
I’ve had no comment thus far in the heated debate over rising medical costs because I simply didn’t know where the increased spending was going. Doctors? Procedures? Administration?
Finally, it seems, there is an answer: doctors and other healt-related companies are optimizing care for revenues instead of optimizing for patient health. This results in too much care and a dramatic rise in costs.
Health-care costs ultimately arise from the accumulation of individual decisions doctors make about which services and treatments to write an order for. The most expensive piece of medical equipment, as the saying goes, is a doctor’s pen. And, as a rule, hospital executives don’t own the pen caps. Doctors do.
The solution, in my opinion, is to somehow change the culture in the health care. I don’t think you can pass any law to fix this. It will just fill things with more beaurocratic red tape.
The Mayo Clinic has figured it out:
The core tenet of the Mayo Clinic is “The needs of the patient come first”—not the convenience of the doctors, not their revenues. The doctors and nurses, and even the janitors, sat in meetings almost weekly, working on ideas to make the service and the care better, not to get more money out of patients. I asked Cortese how the Mayo Clinic made this possible.
“It’s not easy,” he said. But decades ago Mayo recognized that the first thing it needed to do was eliminate the financial barriers. It pooled all the money the doctors and the hospital system received and began paying everyone a salary, so that the doctors’ goal in patient care couldn’t be increasing their income. Mayo promoted leaders who focussed first on what was best for patients, and then on how to make this financially possible.
Another city with low costs, Grand Junction, Colorado has done something similar: pooled their doctor’s together to remove the financial incentive to over-treat patients.
Is there a law that can be passed to encourage this kind of behavior? Maybe. But it will be tricky. When the behavior you are trying to change is based on thousands of individual choices, I think the best first step is to inform and encourage doctor’s to solve the problems themselves. Then, if that fails, pass a law.
Read the full article by Dr. Atul Gawande in the New Yorker. Very informative and very convincing. According to some President Obama has read it and is using it to make policy. The author has even been on Fresh Air from WHYY.
