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Dr. Taylor Dickinson's articles and essays discussing his ideas on tax-preserved Universal healthcare...

The New Healthcare: Physician Reward

Posted: Thu, Apr 21, 2011

By Taylor Dickinson

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Rewarding physicians on the basis of volume incentives or mandatory quality of care measurements miss the opportunity presented by today’s upheaval in health care. The care of patients is about life and death. Reward should ultimately reflect this basic truth.

As physicians join larger groups their priorities needs to shift to accommodate the practice advantages of this new situation. Critical to their success is the recognition that fee-for-service has been their undoing. If they can move beyond their dependence upon this antiquated model then the profession will have a sea-change opportunity.

Measuring outcomes performance based upon the number of aspirins prescribed may statistically equate to an objective measurement of improved survival in myocardial infarction, but it misses the point. Bean counting can only approximate the impact of healthcare on the population. Nuance and the cognitive skill of the physician are discounted in any such approach. There is neither recognition of, nor incentive, to improve the individual lives and outcomes of patients.

The opportunity for meaningful change becomes possible when physician groups accept the challenge of full fiscal risk for the care of their patients. This may arise out of Accountable Care Organizations sponsored by the government or through the planned evolution of Integrated Health Systems. Once established, this fiscal control creates the opportunity to establish physician driven global budgets. The opportunity for truly innovative healthcare is then at hand.

The easiest example to explain the impact of such a global budget is to explore the care of diabetes. The process begins by assembling all the physicians with relevant skills into a Diabetic Care Consortium (DCC). Included in this project group would be the endocrinologists, internists, infectious disease specialists, podiatrists, surgeons, nephrologists, neurologists, and any other skilled physician that may from time to time be required. Members of the consortium may be committed full or part time to the project. The organization chooses the project leader and then the participating physicians would develop and hone the objectives of the program with its leader.

Criteria for measuring the group’s performance may include average HGBa1c, creatinine clearance, number of diabetic foot infections and amputations performed, number of patients with hypertension and stroke, number of patients on dialysis, number of hospital days, and the number of deaths. These parameters can be measured yearly or at other relevant intervals. The cost of care for the patients in the DCC would be estimated at the beginning of the project. Every year thereafter the profit or loss of the program, based upon this initial number, would be determined and its efficacy evaluated in light of the economic outcome. Losses would need to be evaluated by the system as a whole. Profits should be shared between the organization as a whole and the consortium. Members of the consortium would then decide on the distribution of this profit between its members. Somewhere within this formula there would need to be provision for investment in new equipment or projects. This same focused organization of care can be applied to any other disease entity. There will, of necessity, be overlaps in jurisdiction which will require reasoned negotiation.

In this reorganization, savings may initially come from improved efficiency and use of resources, but as time goes on profit must increasingly be realized out of improved outcomes for patients: i.e. fewer amputations, reduced hospitalization costs, less hypertension, less renal damage, and progressively lower HGBa1c average scores. In short better medicine, improved lives and delay in death. Measuring such outcomes performance becomes straight forward, relevant and easy. Reward is then based on a combination of economic outcome and realization of improved clinical outcomes.

Physicians’ incentives become more closely aligned with their basic instinct to heal the sick. As the members of the consortium progressively “buy into” the group’s objectives they will come to recognize those physicians whose proposals for innovation are most successful, those whose clinical advice they most value when patient care becomes intellectually challenging, and those whose leadership they most respect. They will accept differentials in reward based upon their recognition of their own relative contribution.

Improvements in survival and quality of life will ultimately be realized, not only as the by-product of this judicious use of medical skill, but also by the recognition that long term success also requires attention to the long term well-being of patients. Obesity, exercise, and the general application of the principles of public health will be in everyone’s self-interest. The relative contribution of either these public health measures or the application of good medical practice to the care of patients, to the bottom line of these full risk groups will probably never be determined. But neither will ever be achieved unless, within this new healthcare, we learn to focus our efforts around the rational interests of its physicians

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