Paying doctors for performance

There’s a new wrinkle in the healthcare debate. It’s called “paying doctors for performance” commonly abbreviated as P4P.

On the face of it, who could object to P4P? A doctor will be paid based on his performance. The better the quality of medicine he practices, the more patients he saves and improves, the more he will be paid. Oh, wait, that’s not what P4P really means. According to proponents, in P4P, the physicians who will be most highly compensated are “physicians who are perceived to be delivering higher quality for lower cost ….”

Therefore, P4P  is fundamentally unethical.

Let’s look at an example:

If an oncologist treats 10 patients at a cost of $1,000 each, and 9 survive, he has saved 9 lives for $10,000.

Now imagine that a second oncologist treats 10 similar patients. The first 9 respond to the $1,000 treatment, but, again, the 10th patient does not. However, this oncologist refuses to give up and creates a new treatment regimen. This regimen fails, too, and the patient is hospitalized with multiple complications of his disease. On the next try, the oncologist comes up with a life saving regimen, and patient #10 lives. Of course, between the first failed attempt, the second failed attempt, the hospitalizations and the third successful attempt, an additional $10,000 has been spent. The second oncologist has saved 10 lives for $20,000.

Whose “performance” is better? Who should be paid more, the doctor who managed to save 9 people at a total cost of $10,000 or the doctor who saved everyone by refusing to give up and creatively designing new treatment regimens at a cost of $20,000?

Obviously, the second oncologist is the “better” doctor. However, I suspect that a P4P system would consider him less cost effective and would penalize him accordingly. In fact, they might penalize the doctor quite severely since he cost the insurance company double the “average” amount spent by the first oncologist.

The example above shows the perverse results of a P4P system which uses “higher quality for lower cost” as its benchmark. It is not surprising that such a system would deliver perverse results because such a system is unethical on its face.

The fundamental relationship in medicine is the doctor-patient relationship. Society and the law recognize this by privileging this relationship in comparison to other types of relationship. The doctor has a moral and and legal obligation to put the patient’s interests and well-being above his own. Obviously, not every doctor will do that. There are some doctors who might recommend expensive treatments purely to enrich themselves. However, we understand those doctors to be unethical, and they may even be subject to legal action.

In dramatic contrast, however, P4P attempts to inject the insurer into the relationship. Even more objectionable, the insurer asks the doctor explicitly to balance the patient’s interests against the doctor’s financial interest. This is fundamentally unethical and should be banned as a result.

American democracy is a rights based system, not a utilitarian one. Ethically and legally, you are not allowed to violate a person’s rights even if it will increase overall happiness or utility. Each person in a democracy is shielded from the power of others and the power of government by these rights.

Similarly, the sanctity of the doctor patient relationship is a moral right. Insurers are not free to violate it simply because it may free up money to care for others (or more likely to profit the insurance company). Furthermore, it is unethical for an insurance company to ask doctors to violate this patient right.

There are many ethical ways to save money in the current healthcare crisis, but P4P is not one of them.