Correspondence
Doctors and the Clinton Plan
N Engl J Med 1994; 330:1010-1012April 7, 1994
- Article
To the Editor:
In his Sounding Board article (Nov. 18 issue),1 Dr. Relman warns of the danger that investor-owned health plans will interfere with clinical decisions, particularly through inappropriate financial incentives, and he calls for steps to facilitate the organization of not-for-profit health plans. I suggest that in a future competitive environment in which the organizational viability and even survival of health plans may be constantly at stake on the basis of cost performance, these dangers will exist irrespective of a plan's for-profit or not-for-profit status; a for-profit status will be at most a second-order effect. The following, more direct legislative solution seems called for: It shall be unlawful for a health plan to link a physician's compensation directly to medical orders or other medical decisions; however, appropriateness of care may be one factor in periodic reviews of a physician's performance.
Physicians' medical orders are probably the most important determinant of a health plan's costs; therefore, if we demand removal of financial incentives, we incur some obligation to suggest an alternative approach to controlling costs. The answer, I think, lies in Relman's observation that, “as professionals, physicians should be free to use their best judgment in the interests of their patients, but with due consideration of the available resources.” Studies have demonstrated that physicians are notoriously ignorant of the costs associated with their orders2 but that costs are significantly lowered when doctors use a work station containing cost information for medical ordering3. Thus, I recommend that we replace a cost-containment philosophy based on manipulating medical decision making through financial rewards or penalties with a philosophy grounded in the belief that when given full information on costs at the point of ordering, physicians will make decisions resulting in the lowest costs consistent with their view of the care their patients require.
3 ReferencesMelville H. Hodge
TDS Healthcare Systems, San Jose, CA 951341
Relman AS . Medical practice under the Clinton reforms -- avoiding domination by business. N Engl J Med 1993;329:1574-1576
Full Text | Web of Science | Medline2
Kelly SP . Physicians' knowledge of hospital costs. J Fam Pract 1978;6:171-172
Web of Science | Medline3
Tierney WM ,Miller ME ,Overhage JM ,McDonald CJ . Physician inpatient order writing on microcomputer workstations: effects on resource utilization. JAMA 1993;269:379-383
CrossRef | Web of Science | Medline
To the Editor:
Dr. Relman warns against entrepreneurial third-party ownership of physicians' practices, stating that “inappropriate, if not unethical . . . economic levers” may be used to limit physicians' prerogatives in caring for their patients. He concludes that “physicians should not be subject to the economic inducements and constraints now commonly used by managed-care plans” and offers the partial solution of physician ownership.
In railing against the potential (and admittedly perverse) economic incentives to do less, Relman ignores several key issues. First, he does not explain why physician ownership would lead to a substantive improvement. Even if there were no incentive or need to provide a return on investors' capital, a nonprofit physician-owned health plan would still need to control expenditures in order to survive in a cost-competitive environment. How is it that such a plan could achieve this essential control without resorting to the same draconian measures that Relman fears? The profferred answer is the pablum that “physicians should be free to use their best judgment in the interests of their patients, but with due consideration of the available resources.” Although this is certainly an attractive ideal, the fact is that the frugal use of available resources may be in direct conflict with the interests of individual patients. This conflict, which is a primary reason why physicians do not generally use resources more efficiently now, would not even be addressed, let alone resolved, by physician ownership of health plans.
Furthermore, any discussion of entrepreneurial incentives to limit care is one-sided if it does not address the pervasive, equally destructive (if not unethical) entrepreneurial incentives that many physicians now have and would continue to have to provide excessive services in any fee-for-service setting.
Relman would like to see doctors “function as trustworthy advocates for their patients, uninfluenced by the economic interests of . . . plans.” I would extend the sentiment by hoping we can have systems in which physicians are similarly uninfluenced by their own economic interests. Physician ownership of health plans will do little to realize either hope.
Ira S. Nash, M.D.
Massachusetts General Hospital, Boston, MA 02114To the Editor:
I believe comment is needed on a key assumption underlying Dr. Relman's statement that “physicians should be free to use their best judgment in the interests of their patients, but with due consideration of the available resources.” Physicians in the United States have not been able to understand the available resources. This is one of the reasons that physicians are being subjected to the present economic inducements and constraints. There is no question that the health of patients is the focus of physicians' talent and concern. However, the economics of health care is not part of medical training.
Physicians have let financial gain, the threat of malpractice suits, lack of formal economic training, and the technological explosion in medicine push them forward with little understanding of the limits of available resources. I do not think that nonprofit physician-owned plans will change these patterns. There is a large plan of this sort being developed in my community. The goals appear to be protecting the physicians' employment and salaries, getting larger contracts with their respective community hospitals, and collaborating to develop expensive services (such as cardiac surgery) that are well established at several local tertiary care centers. Physicians can handle their patients' health. Can they handle health care?
John Fornace, D.O.
Suburban General Hospital, Norristown, PA 19401To the Editor:
Both Dr. Relman in his Sounding Board article and Dr. Angell in her editorial1 raise important questions about the plan for health care reform proposed by President Bill Clinton. In particular, both Relman and Angell address the potential for loss of physicians' autonomy. Relman suggests that the development of not-for-profit group practices would minimize loss of autonomy under the plan. Although there is much merit in his suggestion, the potential for loss of autonomy is inherent in the way the plan structures payment for medical care. The reason is that the Clinton plan preserves the third-party approach to payment. The same criticism applies to the single-payer system, which Angell favors, the only difference being that in this case the third party is the government.
In their book Patient Power: Solving America's Health Care Crisis,2 Goodman and Musgrave argue that most of the problems with our current system are the result of a third-party system of payment. In terms of the autonomy of physicians (and patients), their argument can largely be summed up by the old saw, Who pays the piper calls the tune. If a third party is paying the bill, the interest of that third party, whether profit or cost control, threatens to subvert the patient-physician relationship. Goodman and Musgrave's solution to this problem is to remove the third party and return control of medical care dollars to the patient. This step promises to reestablish a patient-physician relationship free of potentially erosive third-party interests.
Briefly, their plan involves changes in the federal income-tax code, giving employees rather than their employers tax credits for the purchase of health insurance. Goodman and Musgrave favor a move away from comprehensive medical insurance to coverage for large (catastrophic) medical expenses only, with smaller expenses being paid from a tax-free medical savings account. Medicare would gradually be replaced by a system of medical individual retirement accounts (IRAs). Low-income families and individuals would receive direct government assistance financed by general tax revenues. Regulatory inefficiencies would be minimized.
2 ReferencesLaurence C. Berg, M.D.
Gundersen Clinic, La Crosse, WI 546011
Angell M . The beginning of health care reform: the Clinton plan. N Engl J Med 1993;329:1569-1570
Full Text | Web of Science | Medline2
Goodman JC, Musgrave GL. Patient power: solving America's health care crisis. Washington, D.C.: Cato Institute, 1992.
To the Editor:
The articles by Drs. Angell and Relman raise the chilling specter of physicians allowing themselves to be sold down the river as employees of large profit-making corporations with the usual constraints dictated by the bottom line -- more patients (units) per hour at less cost, so stockholders, perhaps not even in the United States, can maintain their dividends. Of all the slings and arrows besetting our profession, this is the most abhorrent. We did not become medical practitioners so that someone unknown to us could make money from our care of patients.
Medical students are urged to foster the doctor-patient relationship, which takes time. Time is what Ann Landers says patients want most from their doctors, and time is incompatible with making money for the company. Hours, wages, and procedures will be set by businesspeople. It is said that physicians will have control over policy. I was active in the early days of Blue Shield when that was true, but that control is long gone, and so it will be with “managed competition” -- a euphemism for a company making money from its doctors.
We have backed away from government as the single payer in medicine, but maybe we should take a second look. With all its faults and constraints, this approach may be better than medicine for profit, and we still have recourse to modification at the ballot box.
I am all for the Clintons, but they should try again.
Frank J. Lepreau, M.D.
Stanley Street Treatment and Resources, Fall River, MA 02720Author/Editor Response
Dr. Relman replies:
To the Editor: Mr. Hodge, Dr. Nash, and Dr. Fornace are quite right. By itself, nonprofit physician ownership would not necessarily eliminate inappropriate financial incentives for under- or over-service, particularly if health plans compete in a price-sensitive market or if the compensation of physicians is linked to clinical decisions. That is why I favor standardization of premiums and benefit packages, with competition among plans solely on the basis of quality. And that is why I also favor payment of physicians in health plans by salary, without financial rewards or penalties. Given such a compensation system, physicians would certainly be helped in making appropriate decisions if they had information about costs, as Hodge says. However, costs should not be the only, or even the most important, factor. Expected medical benefits are also a critical consideration.
Nash says that a conflict between limited resources and the medical needs of individual patients would not be resolved by not-for-profit physician ownership of capitated health plans. True, but we cannot really know how much rationing, if any, would be required after health care reform. In any case, patients would like to know that their physician was on their side, giving professional opinions uninfluenced by economic incentives or pressures from third parties.
I do not share Berg's enthusiasm for putting the primary responsibility for paying for health care on individuals, through a so-called medical IRA plan. This idea is favored by those who believe people should pay for their own medical care until costs reach a catastrophic level -- say, more than $3,000 per year. But this would discourage patients with low or moderate income from seeking medical care and would almost certainly result in even more rationing by price than exists now. The majority of Americans reject such an approach, because they believe that necessary care should be readily available to everyone, regardless of income.
Arnold S. Relman, M.D.
Harvard Medical School, Brigham and Women's Hospital, Boston, MA 02115Author/Editor Response
Dr. Angell replies:
It is no longer possible to structure a health care system without a third-party payer, because medical care is so expensive and the need for it is unpredictable. The only question is who should be the third party. Dr. Berg's IRA approach depends on government funding, either through tax deductions or through direct subsidies, as well as on the private health insurance industry. Dr. Lepreau makes a strong case for the relative beneficence of the government as the third party.
Marcia Angell, M.D.
