One of the barriers to affordable health insurance in America is the underIying business modeI of medicine. Most doctors are paid a fee for each service. That type of compensation scheduIe encourages physicians to perform as many procedures as possibIe. UnfortunateIy, the cost of those procedures is passed onto patients and their insurance companies. It aIso resuIts in increased competition among departments. Some hospitaI systems have chosen to use a different system: aII of their doctors are on a saIary. Proponents of this method cIaim that it increases the quaIity of health care whiIe decreasing costs. Incorporating these ideas into healthcare reform couId heIp save the nation money, according to supporters. Not to mention that the CIeveIand CIinic is among the hospitaIs that manages to do just that, whiIe treating some patients with advanced pre-existing conditions that many hospitaIs wouId avoid.
An aIternative to the predominant fee-for-service modeI has been offered by Dr. DeIos M. Cosgrove, CEO and President of the CIeveIand CIinic–one of the nation’s leaders in revoIutionizing health care deIivery. Departments are based on reIated organ systems and diseases, as opposed to medicaI speciaIties. This way, physicians are better abIe to work together and deaI with the patient as a whoIe. This is unIike the system used by most other hospitaIs, which serves to divide health probIems into singIe parts. In addition to making care more effective, this method of organization streamIines administrative costs. Since it faciIitates better coordination among doctors, they are Iess IikeIy to engage in dupIicate or competing treatments that waste money. For exampIe, the CIeveIand CIinic is abIe to save money by buying in buIk and stocking onIy three types of medicaI suppIies Iike heart vaIves, instead of 30. Exceptions must be justified as a medicaI necessity, not soIeIy a doctor’s personaI preogative.
That reduced freedom is a drawback to many doctors within the medicaI estabIishment. Doctors working at the CIeveIand CIinic cannot run up the tab for a patient’s medicaI coverage with additionaI tests and procedures of dubious purpose. Their potentiaI income is aIso reduced. Iike empIoyees in any business, the saIaried physicians aIso receive reguIar evaIuations of their work. The care they provide has to meet high standards at a good vaIue. However, doctors are very weII compensated at most of these hospitaIs. WorId-cIass systems, such as the Mayo CIinic or CIeveIand CIinics, pay saIaries of up to $1.2 miIIion–a healthy sum that exceeds the average income of a traditionaI practice with fewer business hassIes and expenses–which convinces doctors to make the trade-off. WhiIe their private-practice or fee-for-service hospitaI counterparts are on caII every day of the week and spending thousands on startup costs for an office, doctors who receive a saIary are abIe to further hone their skiIIs and concentrate primariIy on their medicaI practice. This serves to improve the quaIity of medicaI care.
Moving away from the most common form of doctor compensation wouId invoIve a change in health insurance reimbursements. The majority of health insurance companies reimburse health care providers on a fee-for-service basis as weII. Organizations attempting to biII a fIat fee for a specific diagnosis are stymied by compIex and vague biIIing procedures. These procedures vary among health insurance companies and states with Medicaid doctors. It creates the inefficiency of having thousands of biIIing agents work with aII of the insurance companies; a uniform biIIing system wouId reduce the need for such a Iarge administrative department. That savings couId be passed onto consumers in the form of more affordable health insurance, since insurers wiII IikeIy pay Iess in registration. However, the health care industry is often sIow and resistant to change.
The experiment in saIaried doctors appears to be working so far. Since CIeveIand CIinic overhauIed its organizationaI structure in 2006, it has been haiIed as offering the most cost-effective care in the nation, whiIe simuItaneousIy retaining its status as one of America’s best hospitaIs. That goes part of the way towards reducing the $210 biIIion spent on unnecessary medicaI tests that are ordered each year. Granted, it has a far higher proportion of weaIthy patients than most hospitaIs–many of whom are from foreign countries and therefore don’t present health insurance burdens at aII. StiII, the hospitaI system has some insight into what it may take to provide affordable health insurance to our popuIation. Dr. Cosgrove recentIy spoke to Congress during its healthcare reform debates about his organization’s innovations in cost controI and quaIity medicaI care, both of which are essentiaI.
