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Why Docs are 'Constantly Encouraged to Do Bad'

 |  By jcantlupe@healthleadersmedia.com  
   August 22, 2013

The motivation to properly care for patients "has been sapped by poorly designed incentives," one economist says. Pay-for-performance models, capitation, and bundled payments "often fall short of their goals and must be re-examined."

As healthcare organizations evaluate payment models, the role of physicians is central to where hospitals and health systems want to go and how they will improve the quality and efficiency of care.

But can providers effectively stop doctors from performing too many needless tests? Can they engage with physicians and give them proper rewards? Can patient care be improved, with a proper cost structure for all types of care and disease states? Will the move from fee-for-service to value-based care work?

Will physicians be "motivated" to achieve healthcare's goals, for population health?

"We're continuing to try to come up with some mix that is going to push the doc in this direction or that," says Francois de Brantes, an economist and executive director of the Health Care Incentives Improvement Institute. "You know the tension with docs has been, 'I'm not paid to do X, I'm paid to do Y,'' de Brantes says. "So we're moving from fee-for-service. OK, what's next? We aren't totally focused, yet people say everything is cool, and everything is going to be great."

In a recent Robert Wood Johnson Foundation report and Health Affairs blog post, de Brantes argues that as healthcare moves toward reform, it still must construct payment models that truly reflect variations of care, and incentives in provider contracts. In addition, reforms must overcome a myriad of issues ranging from innate isolation among physicians involving fiscal matters in health care systems, to dealing with improper self-referrals among physicians, he says.

Inevitably, the "carrot-and-stick" approach for physicians, whether pay-for-performance, capitation, wellness bonuses, bundled payments or consumer-directed health plans, often fall short of their goals and must be re-examined, de Brantes writes.

Poorly constructed financial models inevitably undercut physician motivation and result in undesired patient outcomes. Healthcare, inevitably, should look toward the private-sector business world to improve its efficiencies and outcomes, de Brantes says.

"Undeniably for healthcare providers, the motivation to properly care for patients and 'do no harm' significantly impacts the treatment decision-making process," de Brantes writes. "However, this motivation has been sapped by poorly designed incentives. The challenge we face in healthcare is to figure out how to reverse the incentives that currently encourage doctors, nurses, and others to make inefficient and potentially harmful health care choices."

"Said plainly, it's tough to be good when you're constantly encouraged to be bad," de Brantes says.

While Accountable Care Organizations and bundled payments and other fiscal models offer some hope for change, too often healthcare moves glacially, and can't deal quickly enough with problems, de Brantes told me.

When a healthcare academic paper is written, for instance, by the time the major focus prompts debate and change, it is often too late, de Brantes says. "We need to encourage rapid-cycle implementation where folks learn, and figure out what is appropriate," de Brantes says.

Current financial incentives to physicians "negatively affect the professional's motivation by influencing provider treatment choices and potentially harming patients who lack of easily accessible information on the value of treatments," de Brantes writes.

Among the immediate obstacles to true reform that undermines physician "motivation," de Brantes says:

Variability of Care
Health systems need to continually restructure payment models for various disease conditions and overcome variability of its funding for care, from disease to disease, specialty to specialty, subspecialty to subspecialty and region to region. As for many proposed payment models that now exist, certain modes of care, variations in oncology or cardiology, for instance, are not properly defined for proper physician payment, he says.

De Brantes also referred to expenses for treatment of various diseases or illnesses detailed in Dartmouth Atlas reports. He noted that Dartmouth Atlas found more than a two-fold difference in Medicare spending on patient care from one region of the country to another, during 20 years of studies.

The significant variations in costs of "medical episodes of care has led to well-documented waste in resources and harm to patients and oddly enough, most variability occurs with medical episodes that require the most pressing attention," de Brantes reports. To reduce variations of treatment, De Brantes says health care systems should create a "list of targets" that focus on issues such as "episode costs, price per unit, quantity and mix of services" and potential interventions.

Physician Isolation
Oddly enough, de Brantes says, while physicians are impacted by financial incentives within organizations, they are often isolated in the process.

"That's often the case for clinicians employed by large medical groups or health systems," de Brantes reports. "External payment incentives are filtered by the organization which decides how to convert those incentives into salaries and other payments for clinicians. This filtering action might have a very different impact on a clinician's motivation than the original, unfiltered incentive."

Potential Conflicts
De Brantes also lambasted some fiscal relationships involving physicians that may not only undermine their relationships with patients, but impact patient care. Physician ties to pharmaceutical, medical device or biotechnology companies that produce products they use in their practices and physician ownership of ambulatory, surgical, imaging and other freestanding facilities create potential conflicts of interest. That, de Brantes says, surely "saps" physicians' motivation, and could influence their decision-making process.

As de Brantes and I discussed his report, we talked about how hospital leadership can be involved in improving physician incentives, and push physician "motivation."

Healthcare chiefs should learn as much as they can from the private sector, particularly publicly listed corporations, de Brantes says.

"Healthcare should model itself off the private sector, [and] keep experimenting and modifying various approaches for various professionals and their organizations," de Brantes says.

His message to hospital leaders: "You should really take the CEOs, CFOs, and COOs of hospitals across the country and ship them off to Fortune 500 or Fortune 1000 companies, and shadow their counterparts in their organizations," de Brantes says. "That would be a good thing.'

"After all, let's remember that the private sector has been working on employee compensation for decades and continues to balance the incentives so that they don't get in the way of motivation," he adds.

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Joe Cantlupe is a senior editor with HealthLeaders Media Online.
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