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June 3, 2008

Should a doctor think like a clinician or a businessman?

In the U.S., most physicians often think like both. Oh wait, add accounting to the mix too. Clinical care, administration, and billing make up the 3-part mental framework of a physician in the U.S. The two business components represent all the paperwork doctors do after the patient leaves. Exact details of what the person came in for, documentation of the treatment protocol advised, and the appropriate billing code so doctors can get paid by the insurance company. Multiply this by say 30 patients and you have a typical day at the doctor's office. And that's just for one medical provider.

This is a lot of work. Many practices have an "administrative session/day" set up once a week when physicians can catch up on all this paperwork. A physician's day just seems so fragmented that I wonder how they concentrate on the one thing that matters; patient care. I explored this a bit through an international lens, seeing how other countries did it. Do nationalized health care systems like the ones in UK or Canada take away the business component or add more bureaucracy? What does a market-based system such as the one in the U.S. have to offer that they don't? Regardless of all the politics around which system is "better", I focused on just one thing; what occupies a physician's mind on a daily basis making the rounds and taking care of patients?

It comes down to incentives, in many cases monetary. In the U.S., most physicians get a good portion of their income on a fee-for-service (FFS) basis, whereas nationalized docs primarily tend to be salaried. I reached out to fellow blogger, Jason Shafrin of the Healthcare Economist, on this and he said,
"while salaried doctors may be more "objective" they do not have the incentive to innovate as would be the case in the FFS system. Physicians can invent new technologies to better care for patients if they know they will be reimbursed for their efforts in a FFS system. However, if the physician is salaried, the incentive to innovate is lower."
U.S. physicians certainly work harder. The more they do, the more they make. And that's where all the paperwork comes in. The insurance companies, along with Medicare & Medicaid, want to make sure they're not paying for frivolous tests and procedures. There's a very close watch over what physicians do in the U.S. Fraud litigation and skyrocketing malpractice rates are evidence of this. And ironically, the other major component of malpractice, medical errors, drives physicians to practice medicine more defensively and order more and more tests to cover themselves. Talk about a rock and a hard place.

In salaried systems this is less the case. We have a few major ones in the U.S. such as Kaiser Permanente originating from the West Coast and the government-run Veterans Affairs (VA) department. And countries such as Canada and the UK provide much larger-scale examples. From a basic day-to-day care perspective, these systems do provide freedom from the business side of medicine and allow physicians to focus on patient care. But as mentioned above, the trade off is less innovation and less incentive to work hard. On top of that, Jason mentions,
"while the physicians may be salaried, someone is being paid not on a salaried basis. The organization is usually paid on a per person basis (capitation) or fee-for-service. Even if physicians are paid on a salaried basis, management may compel them to increase or decrease procedure rates. For instance, the NHS may put managerial pressure on physicians to reduce utilization of services in order to reduce costs."
Bottomline: Even mental resources have to be allocated. If a physician isn't business-minded, someone else will be on his/her behalf. The economics don't necessarily favor a national or a market system since you lose drive for growth in the former and create drive to overdo in the latter. Maybe the U.S. could benefit from a nationalized sub-specialty system and a market-based primary care system. The hybrid methodology seems to be more favorable here, but that hasn't been tried and tested. The question of optimal patient benefit still remains within this incentive-based catch-22.