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Comment & Response
June 26, 2018

Price Setting for Physician Services

Author Affiliations
  • 1Yale School of Medicine, New Haven, Connecticut
JAMA. 2018;319(24):2558. doi:10.1001/jama.2018.4661

To the Editor In a Viewpoint, Drs Frakt and Chernew1 drew needed attention to the perils of price setting in health care. They cited several examples of policies that distort relative prices and thereby skew demand for certain health services. One of the largest examples, however, was not discussed—the Medicare Physician Fee Schedule itself.

Although the authors acknowledged the effect that price setting has on specialty mix, the very fact that Medicare sets prices for physician services in the first place may lead to the undervaluing of physician time in the diagnostic and therapeutic process. An undervaluation of physician time risks reducing the precious minutes physicians spend assessing patients, thinking through potential diagnoses or treatments, counseling patients, and providing appropriate medical, procedural, or behavioral therapies. Physicians cite insufficient time with patients as a cause of overly aggressive care,2 and less time with patients has been associated with increased diagnostic testing expenditures3 and increased medication prescribing.4 In this way, setting prices for physician services relative to each other and relative to other health services likely contributes to increased use of costly and potentially harmful diagnostic, therapeutic, or even hospital services that might have been avoided if physicians and patients had more time together.