The Economist

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Does The Economist magaizine have the right healthcare Rx?

June 29, 2009 in Physician Compensation | 2 comments

The cover story of this week’s Economist examings healthcare reform in America (“This is going to hurt“).  The story recounts some of the many ills of the U.S. healthcare system: too many uninsured, too expensive, and low quality outcomes.  This is not news.  What does The Economist propose to fix the American healthcare system?  

 

  • Pay doctors a salary.  In general, I support this idea, but it only works if doctors are employees.  Medicare would never pay doctors a salary; they could never track how many patients they saw or how much work they did.  The only way Medicare physicians would be paid a salary was: 1) if they were direct employees of Medicare or 2) they worked for employers who decided to pay them a salary.  For instance, if large, centralized healthcare systems (e.g., Kaiser Permanente, Mayo Clinic) took payments from Medicare directly, it could pay their own physicians a salary.  Salaried remuneration decreases physician incentives to work hard compared to fee-for-service payment, but since overtreatment rather than undertreatment is one of the main problems in the U.S., the salary system could work.  See my own research on how physician compensation affects surgery rates.
  • Get NICE.  The Economist believes that America could use a cost-effectiveness agency like the UK’s NICE.  I agree.
  • Align incentives.  Will pay-for-performance improve health care?  The Economist thinks so but I am skeptical that it will have a large impact.  Medical care is so complicated that paying for better outcomes on one dimension will distract providers from focusing on less measurable, but perhaps more important dimensions.  For instance, the Economist advocates that paying bonuses in Sweden lead to shorter wait times.  However, in the UK, setting the goal that all patients should be treated within four hours of arriving at the emergency room, lead to some perverse incentives.  ”Thousands of people a year are having to wait outside accident and emergency departments because trusts will not let them in until they can treat them within four hours, in line with a Labour pledge.”

Overall, The Economist has some valid ideas of how to improve health care.  However, broad pronouncements will not get the job done.  We need a systems approach in order to decrease the amount of unnecessary medical services and increase the quality of the important medical services that are given.  Like any reform, this is easier said than done.

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Economist health care articles

February 25, 2008 in Current Events | Permalink

This week’s edition of The Economist magazine has some great articles on health care.

  • Mayo with Everything: World-famous hospitals are becoming the hub of economic activity for many cities. For instance, Rochester, Minnesota’s economy is heavily dependent on the Mayo Clinic and Cleveland relies heavily on the Cleveland Clinic to attract high quality health care workers to the Midwest. Are these mega-hospitals welfare improving or are they growing too big?
  • Health care in China: Despite dramatic economic growth, health care is often prohibitively expensive for the poor. Doctors are under-compensated and often accept bribes to supplement their income. “Even though urban health care receives a disproportionate share of total government spending on health, many urban residents fare just as badly [as rural residents]. Li Ling of Peking University estimates that more than half of the urban population has no insurance.”
  • India’s fake doctors: India only has 60 doctors per 100,000 people (compared to 257 per 100,000 in the US). Untrained individuals posing as doctors have stepped in to fill the void. In fact there are more “quacks” than real doctors in India. “Indeed, so essential are quacks to India’s health-care system that the National AIDS Control Organisation says it is planning to include them in its AIDS-control programme, training them in basic care and counselling of people with sexually transmitted diseases. Some quacks, of course, may be perfectly responsible. Mr Noor, for example, swears that he refers all ‘serious cases’ to government hospitals. How he diagnoses them is not clear.“
  • Gates Foundation as a monopoly: The Gates Foundation has done great things to help alleviate poverty and increase the health of residents of developing nations. But is the Gates Foundation gorilla a non-profit monopoly, stifling innovative ideas from smaller non-profits?
  • Virus forecast: Dr. Wolfe proposes a Global Viral Forecasting Initiative. He needs $50 million to build this planet-wide epidemic surveillance system.

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