Get penalized for poor care – Accountable Care

Should doctors be paid as per patient outcomes:

• $3000 fee = a patient has a complication-free appendicectomy and discharged after 3 days hospital stay.
• $2000 penalty = patient has surgical complication requiring readmission for wound infection requiring IV antibiotics.

This is a marked shift from current systems and on the surface this may seem like a crazy system – but I feel this is the way our health systems have to evolve.

I come to this conclusion by analyzing the current incentives to work as a doctor in New Zealand…..

Money: We get paid, and so we turn up to work. We get paid more the more we can do, and hence we train more and specialize.

Altruistic: We have all said the oath, and hence we are ‘really’ only interested in doing good and helping people (not the money) – slight hint of sarcasm (previously I have written about our general lack of doctors ability to recall the Oath).

Regardless of what your incentive is, the end goal should be for quality patient care.

All other professional careers (lawyer, accountant, engineer, banker etc) are rewarded for good work. However, poor work is not tolerated and financial incentives are such that you are unlikely to get paid or be successful if you make errors in your work (eg. if you are a lawyer that loses case after case, you aren’t going to attract many clients).

Is healthcare like this? I suspect healthcare in general gets away with less accountability than other professions. The industry is such that there is increased public tolerance for poor performance or lack of progress then other industries. I guess this arises from the intimate personal connection with ones’ health and the inherent respect and trust for doctors.

However, I believe this is not the best system to develop quality and progressive systems in healthcare. Imagine a world where doctors are given bonuses for doing things well and finding new ways to do treat things better. Surely this is a better way to push up quality and drive down costs, and most importantly, treat patients better.

Conversely, penalties for poor or substandard care would mitigate things which don’t need to go wrong. In NZ doctors are protected from doing things wrong by ACC and indemnity insurance. In the US and Australia (to a lesser extent) there is the additional threat of litigation.

I feel that such a model ties together the incentives for doctors of financial reward and patient focus.

RMOs would be incentivized to see patients in ED quicker, discharge patients faster, provide treatment with minimal pain etc, and all whilst keeping the patients satisfaction at front of mind.

Additionally all health workers would be on the look out for ways to do things better, in hope of financial rewards, as well as mitigating bad events. We would be less dependent on expensive and time-consuming research by doctors and private companies as the primary ways for development of new technology and processes. The hospital would become a breeding ground for doing things better – for the patient!

Surely this is a model of the future. Obama thinks so and the US Healthcare Reform is developing new structures called Accountable Care Organisations, which are much like NZ PHOs and DHBs which are responsible for care for a fixed amount of money. Perhaps the US can learn from NZ.

Have you got thoughts on this? Please share below.