Carrots for Doctors

By Bill Keller
The New York Times, January 27, 2013

With its ambitious proposal to pay doctors in public hospitals based on the quality of their work — not the number of tests they order, pills they prescribe or procedures they perform — New York City has hopped aboard the biggest bandwagon in health care. Pay for performance, or P4P in the jargon, is embraced by right and left. It has long been the favorite egghead prescription for our absurdly overpriced, underperforming health care system. The logic seems unassailable: Reward quality, and you will get quality. Stop rewarding waste, and you will get less waste. QED! P4P!

If only it worked.

For if you spend a little time with the P4P skeptics — a data-bearing minority among physicians and health economists — you will come away full of doubts. In practice, pay for performance does little to improve outcomes or to control costs.

The first problem with P4P is that it does not address the biggest problem. Americans spend more than twice as much per capita as other developed countries on health care — a crippling 18 percent of the country’s economic output, and growing.

But the main reason everything costs less in other countries is that other countries tend to have one big payer — usually the government — with the clout to bargain down prices. A single-payer system has, so far, proven politically unpalatable in this country.…

Bill Keller, the former executive editor of The New York Times, explains why pay-for-performance (P4P) is a false solution to the problems of high health care costs and mediocre quality. Although he recognizes the correct solution – a single payer system – he follows the lead of other journalists and politicians in immediately dismissing it as being “politically unpalatable.”

Was Medicare politically unpalatable?

Consider the following oft-expressed concept. “Single payer is the solution that would bring health care to everyone at a cost that we can afford; therefore we shouldn’t adopt it because of concerns about political feasibility.” Phrased this way, obviously this is a non sequitur.

Let’s jam single payer into its proper place in government. The we’ll see how politically unpalatable it is, or rather is not.