No. 23: Doctors as the Key to Health Care Reform

November 2009

Background

Over the past year, many leading journals have presented articles and editorials describing various proposals for reforming health care in the United States. We have previously commented on some of those proposals in e-Rounds No. 19, but it would have been impossible to cite and maintain a commentary on the plethora of articles supporting a range of reform options, from a single-payer system, to expansion of Medicare or Medicaid, to a system like that of the Veterans’ Administration (VA), to the so-called “public option,” to a co-operative approach to insurance coverage, to a social insurance system. One particularly interesting article, however, appeared in September 2009 and bears attention because of its perspective on the role of physicians in the debate about reforming health care in the United States.

Methods and Limitations

Arnold Relman, MD, is the former editor of the New England Journal of Medicine and a well-known health policy expert. This month’s e-Rounds abstract is based on an opinion editorial written by Dr. Relman. It represents the views of one person and therefore does not necessarily represent the perspective of others, in particular other doctors.

Analysis

Dr. Relman points out that doctors’ decisions in the use of medical resources drive costs and that control of medical expenditures rests in the hand of physicians, not insurance companies, legislators, or government officials. Given that most physicians continue to be paid on a fee-for-service basis, financial incentives remain in place to maximize services. This, combined with a technologic imperative, has advanced specialists and proceduralists, and primary care is “rapidly becoming an endangered species”, in part because of “relatively low economic rewards.” Dr. Relman describes the American system as primary care deficient, noting that specialists can, and do, control the volume and nature of services they provide in a manner relatively unaffected by competitive forces. He contends that cost control will not occur without the elimination of fee-for-service incentives, pointing out that private insurers and the drug industry are supportive of any plan that increases use of their services.

Using as an exemplar health care reform in Massachusetts, a state that enacted “universal” health insurance three years ago by way of an individual mandate to purchase private insurance, Dr. Relman describes the state’s struggle to contain health care costs and attendant discussions about the need to eliminate fee-for-service physician payment. New, and as-yet-undefined, medical management entities — accountable care organizations (ACOs) — are being proposed in Massachusetts, with the implied intent to salary physicians, and to supplement salaries through “pay for performance” incentives intended to promote quality and efficiency. Dr. Relman proposes a simpler alternative: a reformed health care system based on tax-supported universal insurance, with medical care provided by a national network of community-based, private, not-for-profit, multispecialty, doctor-managed group practices. The intended result is that group practices would integrate primary and specialty care and compete with other groups on the basis of quality. Importantly, he proposes the creation of a public agency that would control medical expenditures by establishing standards and accountability without interfering with daily practice.

To advance this ambitious plan, Dr. Relman proposes a staged implementation, with a key requirement being the development of an agreement between doctors, the public, and industry. Dr. Relman acknowledges that this is unlikely to occur, however, and predicts that the alternative of not controlling the economic incentives in medical care will contribute to the inevitable slide of the American health care system towards bankruptcy.

Commentary

This is another in a wealth of opinions about what should or will happen in the battle to reform health care in the United States. At this stage, it seems that a universal single-payer system is no longer under serious consideration and that attention has swung to some form of “public option” to co-exist with the existing patchwork of programs and plans. Yet, some who have provided critiques of the “public option” are confident that it, too, will fail because (1) it leaves in place the high costs associated with multi-payer private, for-profit, investor-owned insurance companies, while forgoing the administrative savings implicit in a single-payer system; and (2) a level playing field cannot exist, despite strict regulation, because patients will be segregated, with profitable patients in private plans and unprofitable, that is, sick, patients in the (increasingly expensive) “public option.”

Meanwhile, as the debate in the United States escalates, we continue to hear of the evils and problems associated with so-called “Canadian-style health care,” while advocates of such a system, like Dr. Relman, propose reforms that share many of the same characteristics.

Relman, Arnold. “Doctors as the Key to Health Care Reform.” The New England Journal of Medicine 361(13): 1225-27, 2009.

Click here to read the pdf of e-Rounds #23 [ENGLISH] [FRENCH]

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