Wednesday, February 10, 2010

Gingrich & Goodman Idea #4: "Allow Doctors and Patients to Control Costs"

The fourth "GOP" healthcare reform proposal advanced by Newt Gingrich and John C. Goodman is to "Allow doctors and patients to control costs". Gingrich complains that doctors and facilities that participate in Medicare do so on a pre-defined payment rates, and that Medicare doesn't compensate doctors for communicating with their patients by phone or e-mail. First, quite obviously, insurance companies are going to negotiate compensation schedules and discounts with their provider networks, so that much of the complaint is a red herring.

Also, in the name of controlling costs, insurance companies will define flat rates for services without offering additional compensation for associated tasks. If a doctor is paid to examine a patient, administer a result, interpret the test, and treat the patient, is it actually necessary to pay the doctor an additional fee to communicate the test result to the patient? That's part of the package. And as soon as you start breaking the package apart and compensating doctors based upon every individual action they take, you at best eliminate the cost savings and at worst open the door to abuse.

To the extent that Gingrich believes that Medicare should add additional services, encourage better communication with patients, counsel patients over their medications, medication costs and interactions, to provide expanded preventive care, and to improve how doctors are compensated, a case can certainly be made. But what does he actually say?
So long as total cost to the government does not rise and quality of care does not suffer, doctors should have the freedom to repackage and reprice their services.
The only obvious way to implement his proposals without increasing the cost to the government is by either cutting services or lowering compensation. If you offer more flexibility - paying a package price but allowing the doctor and patient to define how they interact during the course of the package - you're really just rearranging deck chairs. To a significant degree they can do that right now - it's just that the doctor doesn't get extra money for jotting off the email.

Gingrich and Goodman close with the silly argument, "Once physicians are liberated under Medicare, private insurers will follow." If in fact cost savings could be achieved, why aren't private insurers leading the way?

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