Health Policy

Is It Time to Start Paying Doctors Salaries?


Garson Arthur "Tim" Garson Jr., M.D., MPH, is director of the Texas Medical Center Health Policy Institute
By Ryan Holeywell | October 3, 2017

Medical care in the United States is high-tech and high quality. It’s innovative.

But it’s also expensive. About a third of annual U.S. medical spending is wasteful, and about $200 billion of that waste is due to “overtreatment,” according to many estimates.

Donald Berwick, M.D., a physician who ran the federal agency that administers Medicare and Medicaid, knows the topic well. He calls overtreatment “the waste that comes from subjecting patients to care that, according to sound science and the patients’ own preferences, cannot possibly help them.”

Berwick and others blame fellow physicians for this overtreatment. Doctors, generally speaking, are paid via a system called “fee-for-service.” The more treatment they provide—and the costlier that treatment is—the more money they make, often as a result of bonuses tied to the amount of care they deliver. It’s not that different from the way many other professionals get paid, from plumbers to lawyers to insurance agents. Paying fee-for-service is not unreasonable, but the big problem is that the person who decides whether it’s necessary for a patient to undergo an operation or an expensive test is the same one who’s paid to administer it. Marcia Angell, M.D., a physician and former editor of the New England Journal of Medicine, has called it the problem of the physician being a “double agent.”

“I doubt most physicians are even conscious of this in their decision- making,” said Arthur “Tim” Garson Jr., M.D., director of the Texas Medical Center’s Health Policy Institute.

Overtreatment can take many forms, like when a doctor orders a blood test that another physician recently ordered, or when a doctor orders repeated imaging in response to minor symptoms. For patients, overtreatment can lead to high bills, heightened anxiety and wasted time. Some researchers have managed to quantify the scale of the problem. For example, the Dartmouth Institute for Health Policy and Clinical Practice estimates that 30 percent of Medicare clinical care spending could be avoided without worsening patients’ health outcomes.

Attacking overtreatment is not simple, but the Centers for Medicare & Medicaid Services (CMS) has set out to change the way physicians are paid. CMS is transitioning from fee-for-service to “pay-for-performance,” in which a portion of doctors’ pay is tied to patient outcomes. But according to Garson, that transition has been slow, it’s enormously complex and physician pay
is still based on volume.

His solution: Start paying doctors salaries. Doing so would remove incentives—even unconscious ones—to pursue costlier treatments, and it would drastically reduce the amount of paperwork doctors must complete, Garson argued. He cited research studies showing a 9 to 33 percent reduction in lab tests and procedures associated with physicians who were paid salaries.

A new national survey by the TMC Health Policy Institute indicates that U.S. doctors might actually opt for salaries over the existing form of pay. The survey found that 69 percent of doctors said their preferred method of compensation would be a high proportion of their pay as straight salary with a low proportion of their pay based on incentives, or a straight salary with no incentives at all.

“I am encouraged,” Garson said. “If physicians were against the concept, it just wouldn’t fly. But I think the data are clear that even without consciously changing their practice, they will order fewer tests and do fewer procedures.” A vast majority of studies have concluded that with less overtreatment, patients may actually do better, he added.

To encourage the transition to doctor salaries on a wider scale, Garson said, CMS could pay a bonus to physician groups that choose to compensate the majority of their physicians primarily via salaries. Commercial insurers could implement a similar strategy.

Perhaps it’s telling that some of the country’s top health care providers recognize the merits of the salary system. The Mayo Clinic, the Cleveland Clinic and the Kaiser group in California all pay physicians salaries without volume incentives. Officials at the Mayo Clinic say they’ve deliberately chosen to salary their physicians in order to reduce the potential for conflicts of interest.

“The vast majority of physicians care first and foremost about their patients,” wrote UCLA’s Ian Larkin and Carnegie Mellon University’s George Loewenstein in a widely-read column in the Journal of the American Medical Association published earlier this year. “But a significant body of literature in the social sciences demonstrates that financial incentives can and do influence decisions in ways not recognized by decision makers.”

 




Social Posts

profile_image

University of Houston

@UHouston

RT @CBSNews: An entire class of medical students at the University of Houston get a free ride, thanks to an anonymous donation of $3 millio…

1 hour ago
profile_image

UTHealth

@UTHealth

RT @abc13houston: The most common sports injuries are strains and sprains, but do you know when you might need to see a doctor? The experts…

2 hours ago
profile_image

Veterans Affairs

@DeptVetAffairs

How new initiative will give Veterans and other families a place to call home https://t.co/BUKePgi3Ma via @njdotcom

2 hours ago
profile_image

Veterans Affairs

@DeptVetAffairs

VEText system transforming VA’s medical scheduling process https://t.co/Nw5BDP1Yt7 via #VAntagePoint

3 hours ago
profile_image

Veterans Affairs

@DeptVetAffairs

Today’s #VeteranOfTheDay is @USArmy Veteran Julius J. Siefing https://t.co/zyN1IHSJ7R #WorldWarII

4 hours ago
profile_image

U.S. Department of Veterans Affairs

VeteransAffairs

Today’s #VeteranOfTheDay is Army Veteran Julius J. Siefing. Julius served from 1942 to 1945 during World War II, attaining the rank of Staff Sergeant.Julius described his experiences in the Army in an interview with the Veterans History Project. He was born on October 14, 1921 in New Weston, Ohio. He was drafted into the Army at the age of 22, shortly after the attack on Pearl Harbor. Julius completed basic training at Camp Wolters, Texas before completing additional training in California and Hawaii. He was assigned to an infantry division and sailed to Australia in 1942.Julius and his unit also traveled to New Guinea where they carried food rations from ships and through ten miles of jungle to other soldiers. After securing an airport from the Japanese to allow Army Air Corps planes to land, the unit participated in a raid on Leyte Island in the Philippines. Julius watched as American planes bombed the island before the infantry was ordered to raid the beach. After a nearby dynamite explosion, Julius helped to carry wounded soldiers out of the jungle.Julius also served in Mindanao and Mindoro islands in the Philippines. He was tasked with clearing booby traps and protecting natives from enemy attack. Because of the constant combative surroundings, he was rarely able to rest, attend church or write. While on a mission in the Philippines, a soldier next to Julius lost his arm in an explosion. Julius was able to stop the bleeding and help him to a vehicle. He later learned the soldier was taken to a hospital and survived his injuries.Julius left the military in 1945 with three Bronze Stars. He returned to Ohio and worked as a school bus driver for 43 years while raising his family.Julius passed away on Jan. 23, 2016 in Coldwater, Ohio at the age of 94.We honor his service.

4 hours ago
profile_image

MD Anderson Cancer Center

@MDAndersonNews

#HPV-related tonsil cancer survivor: “If you can prevent your child from having cancer, why wouldn’t you do it?” #CancerMoonshot #endcancer https://t.co/Htyhk9bXjD

4 hours ago
profile_image

UTHealth

@UTHealth

Diabetes study of Asian Indians by UTHealth nurse researcher highlighted in @AmDiabetesAssn Scientific Sessions: https://t.co/lqwcr7xGvi

4 hours ago
profile_image

UTHealth

@UTHealth

Alarming number of women not receiving prenatal care: https://t.co/PQjVoQoAXw via @houstonchron

4 hours ago
profile_image

Texas Children's

@TexasChildrens

"My work serves as just a short interlude in a long period of struggle in the stories of hospitalized families – stories filled with hope." Audrey McKim shares her personal journey helping families as a child life activity coordinator at #TexasChildrens: https://t.co/ICdwf4Tuod

4 hours ago
profile_image

Houston Methodist

@MethodistHosp

Dr. Matthew Sewell, @MethodistHosp dermatologist, will answer your questions about skin cancer risk factors & treatment in a live Facebook video event on 7.25 at 2 p.m. Send in your questions & we will do our best to get them all answered for you. https://t.co/X4DlPJsofi https://t.co/Gg9F0OecK0

5 hours ago
profile_image

Rice University

@RiceUniversity

RT @RiceBizWisdom: As a NASA contractor, Constance Adams designed spaceship interiors for solar system travelers. After a terminal cancer d…

5 hours ago
profile_image

Memorial Hermann

@memorialhermann

At just 23 weeks, Stephanie gave birth to micro-preemie twins—a boy and a girl.“Gage and Sadie were so tiny, so perfect, so beautiful, yet so sick,” she said.Read their NICU story: https://t.co/TWsfKYPfpx.

5 hours ago
profile_image

Texas Children's

@TexasChildrens

Cancer treatment can be very painful physically and mentally. Adding a trained therapy dog to this stressful environment can increase a patient’s energy level and decrease any discomfort or anxiety: https://t.co/2qeTb9WWK7 #texaschildrens https://t.co/jy7PiYGMeY

5 hours ago
profile_image

BCMHouston

@bcmhouston

RT @BCMHouston_News: "Is your cellphone giving you cancer?" @voxdotcom asks. @bcmhouston's @QOstrom helps break down the research. https://…

6 hours ago