Kelley Beloff recently published an important and fact-filled post on physician reimbursement: specifically, fee-for-service vs. capitation. I think this is an extremely important topic on its own, and it’s also important because it ties to many other key topics in medical delivery and finance – e.g., utilization management and rationing. I expect we will be seeing much, much more on these topics. Of course I can’t resist adding my 2 cents. (Well, it started as 2 cents. Sorry.)
The Irish playwright George Bernard Shaw was the author of many sharp opinions in the late-19th and early-20th centuries - opinions that often stung the comfortable classes of his time, and can still make us moderns uncomfortable. I quoted Shaw when commenting on Kelly’s post about capitations:
"That any sane nation, having observed that you could provide for the supply of bread by giving bakers a pecuniary interest in baking bread for you, should go on to give a surgeon a pecuniary interest in cutting off your leg, is enough to make one despair of political humanity."
I think this insight is noteworthy. It comes from the 100-year-old diatribe that introduced Shaw’s play, “A Doctor’s Dilemma”. Shaw’s point was that fee-for-service payment is incentive for a physician to do more. But doing more can also mean marginal or even unnecessary services that, as Shaw vividly pointed out, bring unnecessary risk of injury to the patient.
We moderns find it easy to accept fee-for-service, because it is predominant and familiar, and we perceive it as normal; thus we tend to accept the personal risks that come from medical treatment. On the other hand, we find it much easier to object to capitation – because we worry that capitation provides incentive for our physician to skimp on treatment. Thus we perceive personal risk from receiving too little treatment ourselves. This worries us, even as we read research that shows too much treatment is a general problem, not only for the public health but for the public purse, too. The difference in how these reimbursement methods are perceived is important to keep in mind when thinking about their pros & cons.
Another commenter on Kelley’s post took exception to my quoting Shaw, based on Shaw’s rather repugnant ideas about what we today call medical rationing. For example, Shaw said this:
"If you can’t justify your existence, if you're not pulling your weight in the social boat, if you're not producing as much as you consume or perhaps a little more, then, clearly, we cannot use the organizations of our society for the purpose of keeping you alive.”
In the intro to "A Doctor's Dilemma" Shaw stated the same thing another way:
“In legislation and social organization, proceed on the principle that invalids, meaning persons who cannot keep themselves alive by their own activities, cannot, beyond reason, expect to be kept alive by the activity of others. There is a point at which the most energetic policeman or doctor, when called upon to deal with an apparently drowned person, gives up artificial respiration, although it is never possible to declare with certainty, at any point short of decomposition, that another five minutes of the exercise would not effect resuscitation. The theory that every individual alive is of infinite value is legislatively impracticable
Note “organizations of our society” in the first citation, and "legislatively” in the second. Shaw was talking about what we now call government rationing of medical services.
I think Shaw advocated his position for the same reason that the Obama administration advocates the same position. That is, in order to have an affordable national medical insurance scheme, there must be some reasonable way to control spending. Shaw concluded that to control spending the government must deny at least some medical care. The Obama administration has reached the same decision. In other words, both concluded rationing is necessary.
NHS rations more explicitly, e.g., thru "NICE". Other countries ration less explicitly e.g., the queue. In the U.S. we have rationed largely on price. But you can be certain that rationing explains why the Obama administration is trying to sell Physician Advisory Panels as necessary under PPACA.
Shaw advocated a national medical insurance scheme in the U.K. 50 years before NHS arrived. He felt he had suggested a reasonable basis on which to deny care. This is a very uncomfortable subject. But I ask you: how can a national medical insurance scheme succeed with limited resources, if there is no limit to the expenditure of resources on anyone? In other words without rationing, how can any national medical insurance scheme be “legislatively practical” within “the organizations of our society” - - to echo Shaw’s terms?
Yet the issue before Shaw was not simply financial. It was - and is - a moral and ethical issue, too. This same moral and ethical issue is present in today's debate about the future of our medical care system. Advisers to the Obama administration such as Ezekiel Emanuel (Rahm's brother, btw) sound just as rational - and just as repugnant - as Shaw. However, it's no use to pretend the rationing issue will not exist if we simply ignore it, or to pretend we can safely disregard influential points of view with which we disagree.
If you are interested, I highly recommend this article: "Principles for allocation of scarce medical interventions" Govind Persad, Alan Wertheimer, Ezekiel J Emanuel; Lancet 2009; 373:423–31. A link to this article is found within this earlierInsureblog post.