There are a large number of economists (and others), that simply believe that the reason healthcare is so expensive, is that doctors and nurses simply make too much money and need to be paid less for the services that they perform.
Not surprisingly, those who believe this are not incredibly popular with either physicians or nurses.
After all – telling people, professionals who have dedicated their lives to the industry, and are the suppliers of the vast majority of healthcare services, that they make too much money sends some very disengaging and negative messages. It sends the message that the work done is not valued. It sends the message that the suppliers of healthcare, themselves, personally, are responsible for the high-cost of healthcare and are responsible for the lack of financial sustainability of the system. It sends the message that the suppliers of healthcare (physicians and nurses) lack integrity and are out to fleece the public. It is a direct and very personal attack.
Worse than that, it likely works against the very things the healthcare system really does need – workforce engagement and innovation. It works against aligning the interests of those supplying healthcare with the interests of those in need of healthcare – the users of the healthcare system. It distracts from focussing on the things that really do matter and solving those problems collaboratively.
The things that really do matter are supplying enough healthcare services of a high-quality so that there is little or no unmet need (unnecessary disability, death and suffering) while constraining public expenditures to a financially sustainable level. That is the problem that needs the focus, adequately meeting the health needs of the population. That is the problem that needs to be solved – and solving it will require collaboration – and innovation. It will require physicians and nurses and patients and governments to shift their thinking away from the 1,000s of things that are essentially “red herrings”, things like physician compensation to the things that are actually worth focussing on.
Should the public care if a physician earns $1.5M per year or should they care that as a result of that $1.5 Million as much “health” as possible was bought. Which is a better investment? Paying 20 doctors each a $75,000 a year salary or one doctor $1.5M? It depends, are the doctors equivalent in skill or in productivity? Are the services provided to those who would benefit the most from the services? If the $1.5M doctor has innovated and delivers more health than the 20 other doctors combined, she or he might represent excellent value for money. The cost of a unit of health bought from the expensive doctor might be less than the cost of a unit of health bought from the group of 20 other doctors. Further, the “out-of-public-pocket” cost of Dr. A might be significantly less, as he would face a high rate of taxation on the income they earn.
Unfortunately, the way the system is currently structured, there is no incentive to maximize the amount of health (or conversely minimize the pain and suffering) that is bought with the money available. The price of procedures is standard – the fee for an office visit is the same regardless and there is no price flexibility to account for circumstances of either the physician or the patient. As a result a variety of worrying problems emerge. There are physicians who would like to be working – who might even consider working for less than the standard fee who are barred from doing so and go unemployed. There are patients in need of health services who have unmet needs – patients who might be willing to pay above the standard amount to get access to care - but they too are barred from doing so. There are no market mechanisms to assist in matching the supply of health services with the demand for health services.
Further, there is little incentive to go above and beyond or to provide services that truly meet the needs of the patients served. There is little incentive to provide enhanced services (aside from some personal motivation to do so) – services that set one provider apart from another or might even avoid the use of health services. Technically speaking, the provider who minimizes the use of health services by their patients, does so at the expense of their own income. Technically speaking, the provider who makes his office nicer, also does so at the expense of their own income. Technically speaking, the things that most enhance health for some individuals, might not even be health services – but might be problem solving (ie. Finding adequate housing).
Which speaks to the really, really big problem. The focus is not on maximizing health, or minimizing suffering. It’s about making the providers technicians rather than leaders and the patients throughputs rather than partners in health. The system is hierarchical not collaborative – it is resistant to change, and focussed on the wrong things.