Doctors
should be paid by salary, not fee-for-service, argue behavioral economists
Carnegie Mellon University
While most conflict of interest research and debate in medicine
focuses on physicians interacting with pharmaceutical and device companies, one
important source of conflicts is largely ignored in the medical literature on
conflicts of interest: how doctors are paid.
In a Journal
of the American Medical Association Viewpoint
article, Carnegie Mellon University's George Loewenstein and the University of
California, Los Angeles' Ian Larkin outline the problems associated with the
fee-for-service arrangements that most doctors currently operate under.
Such
compensation schemes, they argue, create incentives for physicians to order
more, and different, services than are best for patients.
"Fee-for-service payments have adverse consequences that dwarf those of the payments from pharmaceutical companies and device manufacturers that have received the lion's share of attention in the conflict of interest literature," said Loewenstein, the Herbert A. Simon University Professor of Economics and Psychology at CMU and a leading expert on conflicts of interest.
"Paying doctors to do more leads to over-provision of tests and
procedures, which cause harms that go beyond the monetary and time costs of
getting them. Many if not most tests and procedures cause pain and discomfort,
especially when they go wrong."
One commonly proposed solution to the problem involves requiring
physicians to disclose their financial interest for a given procedure. However,
disclosure of conflicts has been found to have limited, or even negative,
effects on patients.
Loewenstein and Larkin argue that the simplest and most
effective way to deal with conflicts caused by fee-for-service arrangements is
to pay physicians on a straight salary basis.
Several health systems well-known
for high-quality of care, such as the Mayo Clinic, the Cleveland Clinic and the
Kaiser group in California, pay physicians salaries without incentives for
volume of services performed.
Moving more physicians to straight salary-based compensation
might have benefits not only for patients, but also for physicians themselves.
"The high levels of job dissatisfaction reported by many
physicians may result, in part, from the need to navigate the complexities of
the fee-for-service arrangements," said Larkin, an assistant professor of
strategy at UCLA's Anderson School of Management.
"Instead of focusing on
providing patients with the best possible medical care, physicians are forced
to consider the ramifications of their decisions for their own paychecks."
Arthur L. Caplan, professor of bioethics at New York
University's Langone Medical Center, told Medscape that he found Loewenstein
and Larkin's piece to be "the most novel" in the May 2 JAMA issue dedicated to medical conflicts
of interest. In how they suggest using salaried compensation as a remedy for
conflicts of interest that arise from fee-for-service incentives, Caplan said,
"There's been a lot of talk about this, but not much had been
written."
Loewenstein and Larkin also led a research study in the same
issue of JAMA on how restricting pharmaceutical
sales representatives' marketing tactics changes physician prescribing
behavior.
