Doctors like to do good. They also like to make money. Technically, the ways in which physicians are paid are “colorblind.” Despite this, they contribute to inequality. It’s time to fix payment models that don’t address Covid-19’s disproportionate impact on racial and ethnic minorities and don’t align with broader efforts to make health care fair.
Research shows that doctors are more likely to choose procedures and treatments that are more profitable for them, whether these are better for patients or not. For example, cancer doctors frequently recommend higher-cost chemotherapy because they profit handsomely from it. And hospitals do more of the kinds of surgeries that come with high profit margins, like hip and knee replacements and heart valve procedures, while limiting unprofitable services like psychiatry wards either by keeping only a small number of spots for patients or by simply not offering a dedicated psychiatry ward at all.
The approach used most frequently by health insurers to remedy this is to financially motivate hospitals to control costs and improve quality by tying payments to achieving these goals. The aim is laudable and some programs do benefit disadvantaged populations. The Pennsylvania Rural Health Model, for example, is a collaborative effort by Medicare, Medicaid and private health insurers to provide a fixed payment to rural hospitals each year for all the health care services they provide. Because they’re receiving a fixed payment, hospitals can worry less about which services are more profitable and instead focus on preserving access and improving care for rural populations, whose health outcomes have lagged behind those of urban counterparts.
But because a vast majority of programs that tie payment to cost and quality goals aren’t focused on disadvantaged populations, they create incentives for hospitals to avoid patients from these groups.Read the full NYTimes piece here.