Reform Bills Still Reward Quantity over Quality

HealthLeaders Media Staff, July 30, 2009

Some say President Obama shouldn't have commented during his press conference last week on a situation he didn't fully understand. They say he insulted the integrity of an entire profession whose members are frequently forced to make stressful decisions with the best information available. At the very least, it was a distraction from his broader message on healthcare reform.

I'm speaking, of course, about the tonsillectomy the President used to explain the healthcare system's perverse financial incentives.

"[If] your child has a bad sore throat or has repeated sore throats, the doctor may look at the reimbursement system and say to himself, 'you know what, I make a lot more money if I take this kid's tonsils out,'" Obama said in response to a question about changes to the delivery system. "Now that may be the right thing to do, but I'd rather have that doctor making those decisions just based on whether you really need your kid's tonsils out."

A few physicians were offended by the insinuation that they would so crudely put their own financial interests ahead of the well-being of their patients. The American Academy of Otolaryngology immediately issued a press release to clarify the benefits of tonsillectomies and express disappointment at Obama's "portrayal of the decision-making processes by the physicians who perform these surgeries."

I can certainly sympathize with the difficulty of trying to discuss clinical issues without having a clinical background, but it was a bad example and oversimplified the way individual physicians interact with patients and make clinical decisions.

But that doesn't mean he was wrong about the larger point.

The President prefaced his example by noting the influence of the fee schedule on medical practice, and he certainly isn't the first or only person to delve into how financial incentives affect physician behavior.

Policy wonks and healthcare experts (including CMS) constantly talk about paying physicians for performance and other financial carrots and sticks that will change how physicians practice. Most hospital leaders understand the difference a financial relationship can make when it comes to physician alignment. Even most physicians are aware of the effects of financial incentives; private practices typically divide up revenue based on elaborate compensation formulas that encourage productivity.

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