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Sunday, October 20th 2013

Fee For Service And More Care

On anecdote all physicians claim, and perhaps believe, they provide services irregardless of its impact on their own financial bottom line. And likely on anecdote all physicians will, sincerely, claim the same for most of their colleagues. And so it’s always controversial to claim that physicians provide more care, of marginal or no necessity, based on their own financial gain. But here we are again with evidence for such. A paper from the NBER concludes that California obstetricians are performing c-sections in part motivated by billing.

[P]hysicians are almost 10 percent less likely to receive a C-section, with only a quarter of this effect attributable to differential sorting of patients to hospitals or obstetricians. Financial incentives have a large effect on C-section probabilities for non-physicians

This follows oft forgotten research which has consistently shown that financial interests motivate some surgical procedures. Indeed a two decade old NBER paper implied c-sections were being driven by decreasing child birth. For instance, when the reimbursement for coronary artery bypass graft surgery went down, the number of surgeries performed went up. Many other papers have concluded the same.

Deincentivizing procedures and more healthcare are difficult things. Shifting some of the reward away from volume has been attempted with capitation and basing some reimbursement on things other than volume i.e. pay for performance but as long as there remains substantial reward for doing more it is difficult to imagine doing less healthcare.