Paying Physicians More to Do Less- Financial Incentives to Limit
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Paying Physicians More to Do Less- Financial Incentives to Limit
University of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to LimiterFollow this and additional works at: http://scholarship.richmond.edu/lawreview0“ Part of the Health Law and Policy CommonsRecommended CitationDavid Orentlkher, Paying Phyiiaani Mont to Do Loii: Ftnanaaf InctnthYS to Limit Can, AO Ư. Rich L. Rev. ISS (1996).Available at: http: .■■/scholarship.richm Paying Physicians More to Do Less- Financial Incentives to Limitondedu/lawreview.'vol30/issl /6This Article lx brought to you for free and open access by the Law School Journal at L’R Scholarship Repository. It hatPaying Physicians More to Do Less- Financial Incentives to Limit
been accepted for UKÌuúon u> Vnhvnity of Richmond Uw Review by an authorized editor oi VR Scholarship Repository For more information. please contactUniversity of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to Limitlosion in health care costs has led to serious efforts at cost containment, concerns have been raised that some of the methods used to contain costs may cause more harm than good. In particular, many commentators have criticized the practice of giving physicians personal financial incentives to limi Paying Physicians More to Do Less- Financial Incentives to Limitt the provision of care to their patients. These critics have argued that, if physicians are paid more to do less, patients will suffer harm from undePaying Physicians More to Do Less- Financial Incentives to Limit
rtreated illness, and patient trust in the patient-physician relationship will be seriously compromised. Accordingly, it is argued, financial incentivUniversity of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to Limitier in David Orentlicher, Health Care Reform and the Threat to the Patient-Physician Relationship, 5 Health Matrix 141 (1995) and David Orentlicher, Managed Care and the Threat to the Patient-Physician Relationship, 10 Trends in Health Care, L. & Ethics 19 (1995). I am grateful for the comments of J Paying Physicians More to Do Less- Financial Incentives to Limitudy Failer and Peter Hammer, and the research assistance of Lakshmi Reddy. I am also grateful to the American Medical Association and the Indiana UnivPaying Physicians More to Do Less- Financial Incentives to Limit
ersity School of Law-Indiapolis for theừ support of this research. I would also like to thank Harris Kay and the staff of the University of Richmond LUniversity of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to Limitl of Medicine; Adjunct Assistant Professor of Medicine, Northwestern University Medical School; AB., 1977, Brandeis University; M.D., 1981, J.D., 1986, Harvard University.1.See, e.g., David M. Frankford, Managing Medical Clinicians’ Work Through the Use of Financial Incentives, 29 Wake Forest L. Rev Paying Physicians More to Do Less- Financial Incentives to Limit. 71 (1994); Daniel p. Sulmasy, Physicians, Cost Control, and Ethics, 116 Annals Intern. Med. 920, 924 (1992); Susan M. Wolf, Health Care Reform and tPaying Physicians More to Do Less- Financial Incentives to Limit
he Future of Physician Ethics, 24(2) Hastings Center Rep. 28, 37 (1994). But see Mark A Hall, Rationing Health Care at the Bedside, 69 N.Y.U. L. Rev. University of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to Limit and the Rationing of Medical Care, 140 U. Pa L. Rev. 1713, 1748 (1992).155156 UNIVERSITY OF RICHMOND LAW REVIEW [Vol. 30:155In this article, I will argue that the opposition to financial incentives is ultimately misguided, that it gives insufficient weight to the benefits of financial incentives an Paying Physicians More to Do Less- Financial Incentives to Limitd to the broader context in which financial incentives are used. While personal financial incentives to limit care raise important ethical concerns, tPaying Physicians More to Do Less- Financial Incentives to Limit
hey also have important benefits for cost containment that alternative methods do not have. Moreover, the alternative methods are either insufficientlUniversity of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to Limitntives can be used, it should not prohibit the incentives entirely.II.The Need to Limit Health Care CostsWith health care costs continuing to rise, it has become increasingly clear that we cannot afford all medically beneficial care.3 Advances in technology are pushing health care costs to an unsust Paying Physicians More to Do Less- Financial Incentives to Limitainable level4—spending on health care has reached nearly fourteen percent of this country's Gross Domestic Product (GDP).5 Some savings can be achievPaying Physicians More to Do Less- Financial Incentives to Limit
ed by eliminating waste in the health care system—there are too many hospital beds, radiologic scanners and other medical equipment and facilities in University of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to Limitrces to cover all potentially useful medical services.8 Moreover, the public has a host3.Indeed, we have probably never provided all potentially beneficial medical care. For example, the high cost of MRI scans has meant that some patients with detectable cancers do not undergo scanning because of th Paying Physicians More to Do Less- Financial Incentives to Limite very low probability that they have a cancer.4.William B. Schwartz, The Inevừable Failure of Current Cost-Containment Strategies: Why They Can ProviPaying Physicians More to Do Less- Financial Incentives to Limit
de Only Temporary Relief, 257 JAMA 220, 221 (1987).5.Timothy J. Hauser & James D. Jameson, U.S. DEPT OF Commerce, U.S. Industrial Outlook, 1993, at 42University of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to Limitler, Cost Without Benefit: Administrative Waste in U.S. Health Care, 314 NEW ENG. J. MED. 441, 443 (1986); Steffie Woolhandler & David u. Himmelstein, The Deteriorating Administrative Efficiency of the U.S. Health Care System, 324 NEW ENG. J. Med. 1253 (1991).8.Michael J. Graetz & Jerry L. Mashaw, E Paying Physicians More to Do Less- Financial Incentives to Limitthics, Institutional Complexity and Health Care Reform: The Struggle for Normative Balance, 10 J. Contemp. Health L. POL’Y 93, 95 (1994).1996] FINANCIPaying Physicians More to Do Less- Financial Incentives to Limit
AL INCENTIVES TO LIMIT CARE157of welfare needs, such as better housing, education, and environmental protection, but has a limited purse. If we are toUniversity of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to Limiteneficial care can no longer be provided.Some observers have questioned whether the public has actually consented to the implementation of cost containment measures. It is true that, other than in Oregon where there was broad public input into the development of the Oregon Health Plan’s prioritizati Paying Physicians More to Do Less- Financial Incentives to Limiton of health care services,10 there has not been a formal public discussion and referendum on health care rationing.11 Nevertheless, the public is verPaying Physicians More to Do Less- Financial Incentives to Limit
y much voting with its pocketbook in favor of cost containment.12 Participation in Health Maintenance Organizations (HMOs), which typically charge lowUniversity of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid Orentliche Paying Physicians More to Do Less- Financial Incentives to Limitn the coming years. Some twenty percent of Americans are enrolled in HMOs, and it is estimated that HMO enrollment will increase ten to fifteen percent annually over the next few years.14 Enrollment in either an HMO or a Preferred Provider Organization (PPO)159.This statement is true whether we are Paying Physicians More to Do Less- Financial Incentives to Limittalking about publicly or privately funded health care. Both governments and individuals have limited budgets.10.Norman Daniels, Is the Oregon RationiPaying Physicians More to Do Less- Financial Incentives to Limit
ng Plan Fair?, 265 JAMA 2232, 2234 (1991).University of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid OrentlicheUniversity of Richmond Law ReviewVolume 30 I Issue 1Article 61996Paying Physicians More to Do Less: Financial Incentives to Limit CareDavid OrentlicheGọi ngay
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