Health-Care System Traps Doctors

Health-Care System Traps Doctors
February 29, 2012

John C. Goodman

John C. Goodman is a senior fellow at The Independent Institute and author of the widely acclaimed... (read full bio)

Health care reform that raises quality, lowers costs, and improves access to care is almost inconceivable without physicians leading and directing the changes. Of all the people in the health care system, none is more central than the physician. Yet of all the actors in modern health care, none are more trapped than our nation’s doctors.

No Telephone

Sometime in the early part of the last century, all the other professionals in our society discovered the telephone. It’s ideal for communicating with clients. Yet even today I find I can rarely talk to a doctor by phone.

Medicare has a list of about 7,500 tasks it pays physicians to perform. Medicare doesn’t pay for telephone consultations. Private insurance tends to pay the way Medicare pays. So do most employers. At a time when doctors are being squeezed on their fees from every direction by third-party payers, most become very focused on which activities are billable and which are not. And most are going to try to minimize their non-billable time.

No E-Mail

Sometime toward the end of the last century, all the other professionals discovered e-mail. Everybody e-mails everybody these days. Even the corner liquor store e-mails me when they have a bottle of wine they know I will like. Everybody e-mails everybody—except doctors.

Why is that? This is another task that’s not on Medicare’s price list—at least not in any way that makes e-mailing practical. Since Medicare doesn’t pay, all the private insurers who piggyback on Medicare’s payment system follow suit.

The fact patients cannot conveniently consult with physicians leads to two bad consequences. First, the unnecessary office visitors (say, patients who have a cold) expect at least a prescription in return for their investment of waiting time. All too often the drug will be an antibiotic that won’t help their cold. Were e-mail or telephone consultations possible, the physician might recommend an over-the-counter remedy, avoiding the cost of waiting for the patient and the cost of degrading the effectiveness of antibiotics for society.

At the same time, rationing by waiting at the doctor’s office imposes disproportionate costs on chronic patients who need more contact with physicians. The ability to consult with doctors by phone or e-mail could be a boon to those needing chronic care. Face-to-face meetings with physicians would be less frequent, especially if patients learned how to monitor their own conditions and manage their own care.

Lack of Electronic Medical Records

The computer is ubiquitous in our society, and many believe electronic medical record (EMR) systems can improve quality and greatly reduce medical errors. Yet only about half of physicians have such systems, and most of those are not connected to other physicians’ offices and hospitals, do not allow electronic prescribing, etc.

The same is true for hospitals. One study concluded “information systems in more than 90 percent of U.S. hospitals do not even meet the requirement for a basic electronic-records system.”

Why are most medical records still stored on paper? Again, the short answer is this: There is no financial incentive to do otherwise.

EMRs may improve quality, but in the third-party-payer system, doctors do not compete for patients based on quality. EMRs may be a boon for patient convenience—especially in transferring information from doctor to doctor—but physicians don’t get paid for increasing patient convenience.

Inadequate Advice

Why do doctors so often prescribe brand-name drugs and fail to tell patients about generic, therapeutic, and over-the-counter substitutes? Why do they typically not know the price of the drugs they prescribe or the costs of alternatives? Even when they are vaguely aware of cost differences, why does your doctor not know where you can get the best price in your area for the drug she prescribes?

Once again, the short answer is: They do not get paid to know these things. Knowing the current best price, knowing where the patient can obtain that price, and knowing the prices and availabilities of all of the alternatives is demanding and time-consuming. For the doctor, it is time that is not compensated.

Inadequate Patient Education

Numerous studies have shown chronic patients can often manage their own care, with lower costs and as good or better health outcomes than with traditional care. Diabetics, for example, can monitor their own glucose levels, alter their medications when needed, and reduce the number of trips to the emergency room. Similarly, asthmatics can monitor their peak airflows, adjust their medications and also reduce ER visits.

To take full advantage of these opportunities, however, patients need training they rarely receive. ER doctors could save themselves and future doctors the necessity of a lot of future ER work if they took the time to educate the mother of a diabetic or asthmatic child about how to monitor and manage the child’s health care.

But time spent on such education is not billable.

Escaping the Trap

What is the common denominator for all these problems? Unlike other professionals, doctors are not free to repackage and re-price their services in customer-pleasing ways. The way their services are packaged is dictated by third-party-payer bureaucracies. The prices they are paid are similarly dictated.

Doctors are the least free of any professional we deal with. Yet these un-free actors are directing one-fifth of all consumer spending! This must change.

John C. Goodman

John C. Goodman is a senior fellow at The Independent Institute and author of the widely acclaimed... (read full bio)