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October 6, 2010

What If Physicians Actually Had to Control Medical Costs?

Author Affiliations

Author Affiliation: RAND Corporation, Santa Monica, California.

JAMA. 2010;304(13):1489-1490. doi:10.1001/jama.2010.1426

What if, at the beginning of a year, a physician were to face the following situation? A physician has been told that enough money is available to treat 100 patients who have either condition A or condition B and treating each patient costs US $1000. Based on epidemiological data, the physician is expected to have 100 patients with condition A and 100 patients with condition B during the calendar year. The health benefit of treating patients with condition A is 4 times as great as the health benefit of treating patients with condition B. There is only $100 000 available, which is only enough money to treat half of the 200 patients.

The first patient the physician observes on the first day of the year has condition B. What does the physician do? Treat the patient, knowing that by the end of the year, she will not be able to offer therapy to at least 1 patient with condition A who seeks care? Do not treat the patient and do not mention that treatment is available? Do not treat the patient, but tell him that he should seek treatment with a different clinician or seek care outside the country? What if the physician got tired of the balancing act and moved to another country or quit working as a physician? Will the above situation actually ever occur? What might physicians do to prevent it?

Policy makers discuss controlling medical costs, and academics publish articles analyzing cost-control approaches. But physicians seem oblivious to the possibility that, sooner or later, care will need to be explicitly rationed. Physicians who actually order the health-related diagnostics or treatment for which taxpayers pay must decide how they will cope with explicit rationing. Will there be a physician plan or health professional plan to deal with the eventuality of explicit rationing? Should planning begin now instead of waiting until the decision is imminent?

Policy makers in virtually every developed country are concerned about the proportion of gross domestic product spent on health care. One response has been to commission studies to change how care is paid for. For example, in the United States, efforts are under way to bundle payment for inpatient and outpatient chronic care.1 The development of accountable care organizations, medical homes, disease management, and other activities is designed to moderate the growth rate in the proportion of gross domestic product spent on health care and to reduce the amount that federal and state governments spend on health care, so they can avoid raising taxes. Analyses of these options tend to conclude that although they may make some small difference,2 the relentless growth rate in health care spending will continue, spurred by new medical and biotechnology developments and the aging of the population, among other factors.

What do physicians think about the failure of current cost-control strategies and what alternatives can they offer? Currently, very little is known on a population basis about how physicians approach decisions that involve rationing. For example, in a county hospital with limited appointment slots available for patients referred to neurologists, how does the neurologist decide which patients to see? Is the decision based on the length of the note referring the patient, the specificity of the request, the nature of the clinical problem, the personal relationship between the referring physician and the specialist, or other factors?

In an article on how physicians ration health care, Mechanic3 suggested that physicians do so implicitly because it is just too difficult to do it explicitly. He also suggested that democracy may not be able to support an explicit rationing system.3 A review of qualitative studies examined how physicians implicitly ration care in individual settings.4 The studies are not generalizable, but they establish that when confronting time or supply constraints, physicians are making decisions about how to use their time or deciding which patient should receive which test.4

The rule regarding how many hours house officers are allowed to be in the hospital was recently changed.5 How does a resident, required to limit time spent in the hospital to 80 hours in a week, decide with which of the many patients needing care he or she will spend the last hour of the 80-hour week?

Policy makers have attempted to provide some help. Organizations in England, such as the National Institute for Health and Clinical Excellence, have tried to take the decision from the physician and put it squarely on society by implementing a public process to decide what new technologies, devices, or drugs should be part of the benefit package of the National Health Service (NHS).6 To plan for what was seen as an inevitable reduction in the NHS budget, a series of exercises were conducted to examine the effects of reducing the NHS budget by 10%, or by 20%, or keeping it flat, instead of increasing it at the rate of inflation.7 The Oregon Medicaid plan went through a similar public process, trying to decide what set of procedures and diagnoses should be covered, given a limited amount of money.8 Israel and other countries also have formal mechanisms to decide what new medical technology will become part of the benefit package.

In the United States, some explicit programs are in place to help control costs. For example, in pharmacy benefit plans generic drugs are offered at lower co-payments than brand-name drugs. Many benefit programs cover only generic equivalents of brand-name drugs. On the other hand, there is an implicit, perhaps irrational, mostly unknown process by which physicians, faced with the everyday pressures of their practices and policy decrees, try to determine how much time to spend with a complex patient, whether there is an appointment slot to schedule a follow-up visit sooner rather than later, who gets which therapy vs another, and how constraints in hospital or nursing home beds or specialty availability can be addressed. These microdecisions play out every day. However, this implicit behavior needs to be integrated with explicit policies. Put more starkly, an explicit plan for rationing needs to be developed. But who will do it, and how?

Every new initiative faces the initial decision of whether that initiative can be pursued free of cost or whether investment is needed to make it happen. It is unlikely that physicians will donate all the time and resources needed to develop a plan for morphing implicit rationing into a more explicit process that is done better. It is also highly unlikely that the US government will pay to develop such a plan. Individual donors are not likely to provide funding because most donors want to increase services and help the needy rather than to understand how rationing medical care can be used to control costs. Thus, it will probably fall upon foundations, brave ones at that, to work with health professionals to begin developing a plan to make rationing of health care explicit and fact based. Physicians need to lead the development of such a plan, and patients and the public must be involved. Basically the plan must provide guidance about what to do in an environment where everything cannot be done for everyone all the time.

Physicians must become a constructive voice in deciding how health care costs can more appropriately reflect society's values and needs. Planning for that eventuality should begin now, but cannot be led by a single specialty organization, cannot aggravate the town/gown split in medicine, cannot conclude by protecting the salaries of physicians relative to the salaries of other health care professionals, and cannot be performed in a way that violates the Hippocratic oath. However, it must be done. At the very least, a set of detailed options needs to be developed to contain costs, and physicians should lead the debate about how such options might be implemented.

There is no group more trusted in society than physicians. If anyone can lead development of such a plan, it should be physicians. US physicians are fortunate to live in a wealthy country that respects democratic processes; therefore, developing cost-control options should be easier than in many other places in the world. Hopefully, by the time health care reform is implemented in 2014, there will be a set of physician plans and options, fully debated, that examine not only how reasonable health care coverage can be provided to everyone, but also how it can be done in a way that is affordable.

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Article Information

Corresponding Author: Robert H. Brook, MD, ScD, RAND Corporation, 1776 Main St, Santa Monica, CA 90407 (robert_brook@rand.org).

Financial Disclosures: None reported.

Online-Only Material: The author interview is available here.

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