When possible, I prefer people who work for me to have incentives that are aligned with mine. PE-owned medical practices and even many private practices throw that out the window, with financial incentives to do procedures or run tests.
I was talking to my wife’s obstetrician about this last week and he also feels strongly about it. He’s paid a flat salary and gets no financial benefit for a c-section vs. an induction vs. a conventional delivery. I’d like to keep it that way.
That seems infinitely better than the status quo. Having unnecessary procedures is much worse. With the former you can go to another doctor, with the latter they'll just run up your bill until you're broke or dead unless you're one of the exceedingly rare few who gets medical advice from multiple doctors (most can't afford that or do not have alternative in-network doctors).
Financializers and engineers so often miss the human factor, or try to design around it. At some point in this process involving care for humans, you have to rely on people simply choosing to do the right thing, even if it's hard. This has been medicine's tradition for a long time. The fewer layers between doctor and patient the easier it is to do this. You also have to provide enough resources for them and some kind of work/life/pay balance.
In Canada we have fee for service, with incentives to care for specific populations (remote or chronic conditions etc.) Doctors (or their clerk) do their own billing direct to provincial health services. It works. We rely on individual morality and they generally do the right thing. Our outcomes are good.
Doesn't this apply to all jobs? You're sort of suggesting that salaried employment can't work, because employees will be incentivized to do the easiest or least work. Clearly it does work in practice though, despite this alleged fundamental flaw.
Yeah. Doctors will be incentivized to do the easiest procedure. So what? As long as it treats me, the easiest procedure is probably the best one because it's so simple that it's harder to get wrong. There are scenarios in which the best patient care would involve complex procedures but in that case, the doctor is incentivized to do those because the complications that might arise from a simple procedure are much harder to deal with than doing the better, albeit harder procedure first.
I think there’s more nuance than that. I’m guessing you work in a job like tech where incentivizes are typically more carrot-based.
IMO the effectiveness of carrot (variable bonuses/pay, a many-tiered level structure with promos between as “carrots”, being disciplined or fired as “sticks”) incentive structures depends on how easy it is to evaluate good vs bad work at a job. In tech it can be hard to distinguish mediocre vs bad work which is why we don’t have a lot of stick incentivizes; good work is a lot easier to recognize so instead we have carrot incentives.
While for some medical jobs like being a surgeon good work is easier to recognize vs mediocre work, it’s a lot easier to identify bad work: bad medical outcomes, low patient satisfaction, less patients seen per hour. So as a result you don’t need as many carrot incentivizes as in tech and can probably get by with more stick incentives. Fwiw I think carrot incentives often have a lot of drawbacks as people optimize for the carrot directly rather than “doing a good job”. With sticks you optimize against sticks, but when you have signals like patient satisfaction to account for, you have a very strong stick signal.
Incentives are unavoidable. So best to try to identify them whether you want to change them or not. “Highly motivated” in a way means even more driven by incentives, just a particular set of them.
Traditional American fee-for-service medicine has been absolutely shown to (a) drive practitioners to do unnecessarily risky and expensive things and (b) fail to produce better outcomes than salaried physician facilities.
Am I a Pollyanna for believing all other things being equal, doctors want to do the ethical thing and that direct financial incentive to do otherwise is an obstacle they have to overcome.
A bonus based on risk-adjusted outcomes would put pay in alignment with patient care. This would require much better outcome analysis and reporting though (also a good thing).
I agree that incentives are frequently and perhaps typically exploited, especially when crafted carelessly or not iterated upon, as most incentives seem to be.
I would be eager to contemplate a clinical outcome based incentive scheme.
Came here looking for this angle. Seeing doctors now feels like talking to someone who has memorized an actuary-like table for the doctor's risk/reward versus patients benefit/outcome as in the past.
Have a torn meniscus and given age is dumped into "excise meniscus tear" bucket. While Dr knows that shortens the path to knee replacement (which he no less pointed out on several occasions).
Going to Dr. Now seems like you are a walking revenue center vs. patient in need.
(ps. Many current accredited studies suggest repair attempt vs. removal)
I work in a private practice firm that’s been bought by private equity. There is truth to everyone’s comments here on both sides to some extent.
Young child - I have trained in mostly adults with some pediatric experience. Can I do a simple procedure on a teen? Probably. If something goes wrong I’m afraid I’ll be punished for not referring them to a pediatric center that specializes in these things. Of course if I’m at my main hospital where they do these often, I feel more comfortable doing pediatric procedures to an extent.
Mental health not really in scope of radiology
Obese back pain - I do a lot of procedures for these and certainly there are some surgeons that will operate on anything but I’d say 80-90% of spine surgeons will refer out to rule out every last cause before operating.
We are kind of incentivized to do procedures right now in American healthcare but I will say all my partners are cautious about just doing stuff.
Physicians are absolutely reimbursed per procedure, per surgery, per test, etc. OB specifically has a higher concentration of employed doctors, but the hospitals are still reimbursed the same way, and these numbers are 100% taken into account when determining things like bonuses and promotions. But other specialties (like family med) are still dominated by private practices where physicians directly earn more by doing more.
The balancing act of this is that oversight is (typically) by qualified medical professionals who can judge whether a given procedure, test, surgery, etc. was medically indicated or not.
> 100% taken into account when determining things like bonuses and promotions
Eh, there's some truth to what you said but it's a bit of a stretch.
For bonuses, it depends on specialty and practice. In my current job I have zero incentive structure, period. If by some miracle, zero patients showed up on my shifts over the course of an entire year, I would make exactly the same as if I averaged 20 patients per day. I also don't get any reimbursed for any of the procedures I do -- 100% of that goes to the hospital. This is an increasingly common compensation model in pretty much every nonsurgical speciality and even in a small number of surgical ones (Ob/Gyn, as you mentioned).
As for promotions, I don't
think that's true at all. First, physicians tend to have a very flat hierarchy outside of academics. (At many hospitals, you're either CMO, a department chief, or just some guy.) What this means, in my personal experience, is that promotion is such a remote possibility that it's something that 80 to 85% of physicians don't spend any time thinking about. Second, productivity is not a principle criterion for promotion. When a hospital or clinic promotes a physician, they take a large chunk of that physician's clinical time and replace it with administrative work. If you're trying to maximize revenue, your most clinically productive person is precisely the last person you want to do that with.
> But other specialties (like family med) are still dominated by private practices
Family medicine is definitely not dominated by private practices, at least for new grads. Private practice is quickly going extinct everywhere except for those specialties that have a high proportion of out-of-pocket payors (plastic surgery, dermatology, orthopedics) or those specialties where the demand is high but the supply is so thin that hospitals can find themselves battling with each other to sign contracts with the one of the few practices in their area (neurosurgery, otolaryngology, CT surgery in some parts of the country).
I don't think that's typical anywhere. The incentives they face are less concrete. It may be more inconvenient or uncomfortable for the doctor. If something goes wrong and there is a legal risk, it's difficult to retroactively justify not immediately changing strategies.
In the US, C-sections reimburse higher than vaginal deliveries across the board. What's changed over the years is who gets the extra money from the C-section. It used to be the physician, but nowadays it is increasingly the hospital. The incentive to do C-sections over vaginal deliveries is still there, but it's transforming into a population level incentive (i.e. is the hospital structuring staffing and workflow in a way that favors C-sections) rather than an individual one (i.e. is a particular physician very trigger happy with C-sections).
> PE-owned medical practices and even many private practices throw that out the window, with financial incentives to do procedures or run tests.
Quite the opposite. They tend to be under capitated contracts with insurers, which means they are responsible for the costs of services they provide, but receive a flat amount for reimbursements. This explicitly encourages underutilization of care.
I was talking to my wife’s obstetrician about this last week and he also feels strongly about it. He’s paid a flat salary and gets no financial benefit for a c-section vs. an induction vs. a conventional delivery. I’d like to keep it that way.