Monitoring for Money

During his Town Hall meeting in New Hampshire, President Obama said:

“…if a family care physician works with his or her patient to help them lose weight, modify diet, monitors whether they're taking their medications in a timely fashion, they might get reimbursed a pittance. But if that same diabetic ends up getting their foot amputated, that's $30,000, $40,000, $50,000 -- immediately the surgeon is reimbursed. Well, why not make sure that we're also reimbursing the care that prevents the amputation, right? That will save us money.”

Besides the president’s persistent and offensive implication that physicians regularly subject their patients to painful and risky surgery to line their pockets, it seems the president could use a refresher in basic economics.

Physicians don’t ignore their diabetic patients until they develop peripheral neuropathies only to dump them on a surgeon who lops off their limbs to line his pockets. Surgery is always a last resort and usually becomes necessary when a patient doesn’t comply with treatment or if a compliant patient just gets unlucky and develops complications requiring surgical intervention.

Since the key to controlling diabetes is patient compliance (a factor of treatment completely outside the control of doctors), how would paying doctors more for monitoring patients with no guarantee of compliance and an associated reduction in surgeries save us money?

How will government even decide whether a doctor is adequately monitoring patients so that he may be paid for monitoring instead of sending patients for presumably unnecessary surgery? One metric is the changes in the patient’s condition. However since those results are largely a function of patient compliance, doctors have incentive to drop or ignore non-compliant patients. If we are to simply take the doctor’s word that he is calling and reminding the patient a certain number of times in a given period, then that’s a system that can be easily gamed. As we discussed in an earlier post, when outcomes and payment are determined by a third party, the incentives tend to be perverse.

President Obama’s game plan will cost more than the status quo and it will create more perverse incentives for physicians.