Arnold Kling  

Health Care Follow-Up

Leviathan... Oil Econ Follow-up...

In an earlier post, I said that health care funding should focus on outcomes, rather than procedures. David Cutler has thoughts along the same lines.

Why don't we pay a little bit more to make sure that people don't have colon cancer rather than pay so that they have colonoscopies...
I want to put the money in a quality improvement fund. And here's the way it works. I use what the clinical literature suggests as appropriate care...And you see how well the doctor followed them. Sometimes they would be process measures, like, did the doctor do something? In some circumstances, like, for example, at a hospital level, many states evaluate how well hospitals do in terms of mortality for common surgical procedures. So you can evaluate outcomes. Sometimes you can measure the satisfaction of the patients. There are a number of different dimensions here. And you assign points. So you might get one point for every time something goes right and you lose a point for something that you didn't do right.

In addition, Cutler has the ultimate rebuttal to those who say the United States gets a bad return on investment in health care. He has some very specific calculations which demonstrate that the returns are high.

For Discussion. What sort of resistance might doctors offer to Cutler's "point system" compensation concept?

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COMMENTS (4 to date)
Lawrance George Lux writes:

Doctors have been traditionally resistent to outside supervision, basically because they like to cover up their mistakes. I believe the record is 39 malpractice cases against one Doctor for the same thing, a procedure banned before the Doctor had attended medical school. He was supposedly supervised by Hospital superiors, and a regulatory board. I heard somewhere he started up practice in another State. The specific State Medical Board in which the malpractice occurred still refuses to hear the Case. lgl

stan writes:

I was absolutely appalled at the poor economic analysis in Cutler's talk. I made it through 10 pages before I had to barf.

He uses average analysis rather than marginal analysis to determine the payoff for additional investment in health care. This is a freshman mistake. I can't believe he teaches at Harvard.

Ronnie Horesh writes:
What sort of resistance might doctors offer to Cutler's "point system" compensation concept?

Doctors might oppose a point system for the same reason they might oppose your suggestion [in your earlier post] that health care providers be paid for outcomes. The key [I believe] is to understand that better health outcomes might have little to do with the current health care providers. All sorts of non-health care initiatives might lead to better health outcomes: free driving lessons for teens, traffic calming, subsidised pets for the elderly, vigilante patrols in violent neighbourhoods etc. We need a system that rewards better health outcomes, whoever generates them and however they are generated. My Social Policy Bond idea is one suggestion, which has the further advantage that it would channel market forces into achieving targeted outcomes.

Chris writes:

Using outcomes to measure the performance of doctors is a big mistake. People have tried doing this in cardiology in New York state and it was a failure. Hospitals were rated for the mortality and morbidity of certain procedures, such as angioplasty or Coronary Artery Bypass Graft. It created a perverse incentive: the healthiest patients were referred for CABG because they were most likely to survive, even though they needed it least. The sickest patients, who needed CABG most, were turned away because if they died it would wreck the hospital's score. Statistical comparisons between states which had or had not implemented ratings systems showed that almost all of the supposed improvements in quality in the rated states was due to bias in the refferal for the procedure.

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