The N.Y. Times (“…No Rhyme or Reason“) has an interesting essay about how doctors financial incentives pressure them to run too many tests on patients and refer them to too many specialists.
Doctors are usually reimbursed for whatever they bill. As reimbursement rates have declined in recent years, most doctors have adapted by increasing the quantity of services. If you cut the amount of air you take in per breath, the only way to maintain ventilation is to breathe faster.
The Healthcare Economist believes that money matters in medical matters. My research regarding specialist compensation shows that financial compensation has a huge impact on surgery rates.
Musing on the modern propensity for physicians to overtreat their patients, one hospital executive said:
“The hospital is a great place to be when you are sick…[b]ut I don’t want my mother in here five minutes longer than she needs to be.”