H/T to Matthew Holt who alerted me to this article through Twitter.

A Modest Proposal On Payment Reform

Reinhardt loses me here (early in his article):

Basically, my proposal is to move our health system to a common relative value platform, for at least physicians and hospitals, to be used as a platform for charging all patients. For starters, one could use the diagnosis-related groups (DRGs) and resource-based relative value scale (RBRVS) now used by Medicare as the first-stage relative value scales, which could be refined over time on the basis of either cost or imputed value.

He, like most health economists and politicians, does not understand how DRGs and more importantly RBRVS has led to our increasing costs. RBRVS seems so logical, and yet it is so destructive.

We should always follow the money. RBRVS rewards physicians using individual patient services as the unit of charge and collection. Thus, we reward speed and incompleteness.

Let me provide the most egregious example. I see a patient in clinic for diabetes mellitus and hypertension. The patient complains of dyspnea on exertion.

I care for the DM and the blood pressure today, and schedule the patient back later in the week to address the dyspnea. Why? Because I now have 2 charges for the same patient – and I will be paid!

If I handled the dyspnea at the time of the first visit, I likely could not charge any more for that visit, and my schedule would suffer. I am penalized when I spend more time with the patient – even though spending more time is clinically appropriate.

Only someone who does not understand human nature and medical practice could either invent or endorse using RBRVS. This system is continuously gamed, addressing arcane illogical rules (like the number of systems addressed for history and physical exam), and figuring out how to maximize billing and minimize time spent with patients.

Any rational payment system must focus on time. We pay plumbers based on time. We pay lawyers based on time. We all understand that for professionals, time is money. Yet we have a payment system that undervalues time and overalls brevity.

Now I actually do not know physicians who would not address the dyspnea. But I suspect that such situations occur every day. I know that physicians cannot address all the patient’s issues at each visit. RBRVS does not distinguish between a patient for 4 problems and one with 10 problems. RBRVS focuses too much on “documentation”, but not documentation of thought process, but rather checklist inclusions. Our notes are longer and less informative, secondary to a horrible payment system.

So, while I empathize with Dr. Reinhardt’s desire to have a level playing field, I encourage him to restructure our payment system. I do not read about changing payment in health care reform proposals, and this saddens me. We almost always get what we pay for, and the architects of reform ignore this concept.

We need health care reform. I like many things in the bill. I only wish that the architects understood the evil of payment. One can only wish.

Related posts:

1. Hopefully Obama understands
2. Are the Democrats destroying health care reform?
3. Primary care payment – is win-win possible?
4. The barrier – echoing my mantra
5. Time – what the suits do not understand

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