Have you ever noticed how many people there are who (a) are not medical doctors, but (b) are firmly convinced they know how medicine should be practiced, and (c) are more than willing to tell everybody else about their ideas? On rare occasions (for example, here), I have succumbed to the temptation myself.
If you find that strange, be aware that there’s another industry where the exact same thing happens: education. In both fields, the people who pay for the service and the people who receive the benefits are different entities. Perhaps for that reason, one typically finds a sea of mediocrity punctuated by islands of excellence, scattered almost randomly. Invariably, someone asks: “Why don’t we look at what’s going on in the islands of excellence and copy it everywhere else?” Why not, indeed? In education they have been trying to do this for more than a quarter of a century with no success, whatsoever.
What brings all this to mind is a New York Times article in which Alain Enthoven, Uwe Reinhardt, Harvard Business School Professor Clayton Christensen and others seem to want to try the very approach in health care that has failed so miserably in education.
I have climbed the highest mountains…
I have run through the fields…
I have scaled these city walls…
But I still haven’t found what I’m looking for.
The mentioned islands of excellence (with which I agree) are Intermountain Healthcare in Utah, the Mayo Clinic and the Geisinger Health System in Pennsylvania. But also mentioned are the Veterans Health Administration (which seems to score well only on the parameters the VA itself happens to measure [see here]), and Kaiser Permanente (which took some pretty brutal hits on 60 Minutes when California doctors accused it of killing patients and subsequently of dumping patients [here] and in Regi Herzlinger’s latest book).
But not so fast. What we really mean by “islands of excellence” are doctors practicing medicine that is lower cost and higher quality than what everyone else is doing. How do we know these models are ideal? How do we know they can be replicated everywhere else? We don’t.
As loyal readers of this blog already know, doctors are trapped in a dysfunctional payment system in which they have no ability to repackage and reprice their services the way other professionals can. The doctors in the above five systems are all employees. The only other way they can practice is as fee-for-service practitioners – alone or in groups. What they cannot do is form professional relationships with facilities and get compensated the way lawyers, stockbrokers and accountants are paid. Suppose we said to lawyers: “If you are practicing labor law or contracts law, you can form partnerships and receive bonuses each year based on each attorney’s contribution to partnership revenues; but you cannot have similar financial relationships with patent lawyers, antitrust lawyers or criminal attorneys.” Would that make sense? Of course not. Yet these are the kinds of restrictions we have imposed on every doctor in the country.
Because of the Stark Amendments, doctors and hospitals either have to be completely financially independent or their relationship has to be employer/employee. We have completely closed off the opportunity to form relationships of the type that are common in every other profession.
The only way to discover the best models in health care is to quit suppressing the market and allow competition to flourish. But how can we do that? Alert readers will recall we have already suggested how to do that here. More on the solution next week.