Blog | Thursday, October 13, 2016

Why fee-for-service isn't always necessarily a bad thing

One of the biggest shifts in American health care over the last several years (and we've only just seen the tip of the iceberg so far) is the shift of the system away from the traditional fee-for-service model, and towards a system based more on quality, outcomes, and yes, a degree of rationing. By all measures, we know that the pure fee-for-service model—at least mostly funded by Medicare—is unsustainable. Some estimates even suggest health care spending could approach close to 50% of the entire nation's GDP in the next 50 years!

Put simply, if the brakes are not put on in some way or another, the current system will completely bankrupt the nation very soon. So, as a solution, policymakers are doing everything possible to halt the exponential growth in spending. Moving away from fee-for-service has understandably ruffled a lot of feathers, because it not only requires changes in how we go about funding healthcare, but also the whole philosophy of how we work and think about the practice of medicine.

In its purest form, fee-for-service always is a dubious way to administer health care. That's because the more we investigate, test and intervene—the more financial rewards potentially exist. If there's no thought about whether or not certain things are actually really needed—and everything is just reimbursed regardless—that's really not a healthy thing (no pun intended). It also doesn't put the right amount of focus on preventive medicine and wellness.

I've seen situations exist in certain Third World countries I've visited, where everything is completely paid out-of-pocket, and doctors are a bit ruthless with getting as much as they can. An unacceptable situation. If that's human nature at 1 end of the spectrum, I'd like to focus on human nature at the other end of the spectrum. I grew up and went to medical school in the United Kingdom, which probably has the most centralized and regulated health care system in the world. The National Health Service, NHS, is a national treasure across the pond—widely respected and admired. But there's an aspect of that system which really didn't sit well with me, and made me all the more appreciative of the United States.

You see, in the UK, within the entirely government-run and funded health care system, you have the complete opposite mentality of fee-for-service. Over there, the mantra is to not treat and avoid intervention as much as possible. I remember when I worked in NHS hospitals, the pushback general practitioners would get (often disrespectfully) if they ever wanted to admit a patient to hospital. I remember how hard it was to get specialists to see our patients in the hospital and how much we had to justify (almost to the point of getting onto our knees!) to the radiologist, if we ever wanted to get a CT or MRI scan.

Now I don't mean to knock the amazing work that doctors in England do on a daily basis and how hard-working they are (many of my friends are still there). But it's only human nature that when you get paid the same to see 5 patients a day, or 25 patients a day, the work ethic on a human psychological level is always going to be different. When I first came to America, it was a pleasure to be able to order tests at will (not frivolously), but at least not get so much resistance every time I felt my patient needed something done. It was also great to call specialists up and have them “thank me for the consult” and see the patient in quick time. A total customer service mentality, with the underlying philosophy that the harder you work and more productive you are, the more you will get paid and reimbursed.

America, be very wary of moving towards a rationed and “quality” based health care system that doesn't have the right rewards and incentives in place. The American public may be very disappointed with what we end up with.

Suneel Dhand, MD, ACP Member, is a practicing physician in Massachusetts. He has published numerous articles in clinical medicine, covering a wide range of specialty areas including; pulmonology, cardiology, endocrinology, hematology, and infectious disease. He has also authored chapters in the prestigious "5-Minute Clinical Consult" medical textbook. His other clinical interests include quality improvement, hospital safety, hospital utilization, and the use of technology in health care. This post originally appeared at his blog.