Channeling my inner James Carville and Willie Sutton

“It’s the chronically ill, stupid. That’s where the money is”

Every medical student has learned “Sutton’s Law”. When we are trying to teach trainees to prioritize diagnostic evaluations we tell them to “go where the money is”, to focus on the most likely diagnoses. “Where the money is” is a quote attributed to the bank robber Willie Sutton. A gentlemanly robber who never carried a loaded gun and never took money from the bank’s patrons or the guards, Mr. Sutton was supposedly interviewed during one of his lengthy prison stays and asked by the reporter why he robbed banks. The reporter quoted Sutton as saying “because that’s where the money is.” Although Mr. Sutton denied ever saying those words, they persisted as “Sutton’s Law”.

When political strategist James Carville was trying to keep his candidate, one William Jefferson Clinton, focused on the real issues in his presidential campaign, he taught candidate Clinton and the entire staff the following mantra: “it’s the economy, stupid.”

As I have been thinking about the issue of reducing the enormous costs of healthcare I have thought about “where the money is”; where we spend most of our money in healthcare and the answer is simple but also complicated. We spend most of the money on patients with multiple chronic illnesses. In fact, people with more than one chronic illness consume about 2/3 of Medicare’s funds each year.  Since Medicare represents approximately 20 percent of the overall federal budget, 2/3 of Medicare spending is an enormous amount of money.

One could, perhaps argue that all of that spending was worth it if the patients were getting stellar medical care; care that allowed them to live fuller and more productive lives. Alas, that simply isn’t the case. These people see many different physicians who rarely, if ever, communicate with one another. They take redundant medications, some of which have untoward drug-drug interactions, and they spend their days confused by an indigestible volume of sometimes conflicting information wandering between doctors and emergency departments, their lives dominated by their illnesses.  Or, in the worst case, they get little or no information at all.

Given the current state of affairs, can we really ever hope to reduce costs and deliver better care? Not unless we radically alter the way we do business.

In the next few paragraphs, I will outline what needs to change and in a subsequent post, I will discuss how we can change things for the better.

One of the key reasons for the current mess is a “production” model of care delivery. The basis and main driver for the production is a piecework payment scheme that is known commonly as “fee for service”. The doctor does X amount of work and gets Y amount of money in return. This has been the dominant system of physician payment since antiquity. In fact, there are references to a fee-for-service based payment scheme in the 4,000 year-old Code of Hammurabi. Hammurabi’s payment scheme was actually pretty enlightened, even by today’s standards. It set fees at a level that recognized the physician’s worth to society, included a sliding scale so that nobles were expected to pay more and common laborers less, and set forth penalties for inferior quality; something we are just getting around to today. (OK, Hammurabi’s penalties were harsh-loss of hands for major screw-ups – but at least he recognized that poor quality care should not be rewarded.)

Fee for service remains the dominant payment across the globe. So what is what is wrong with such a popular and long-lived method of physician compensation? Honestly, the real fault is not so much with the fee for service system but with the way it has been implemented.

First, visible work products have been given higher values than other kinds of services like health maintenance and anticipatory guidance. In practical terms, this means that doctors who do procedures get paid better than those who do not. During the 80’s and 90’s when the enormous cost of healthcare finally caught the attention of the public and elected officials, one strategy for decreasing cost was to decrease the payments for various medical services. The result was predictable. Doctors just tried to do more procedures and to see more patients, giving each patient less time. It takes time and attention to see an elderly patient with multiple medical problems. One of my colleagues, a geriatric specialist, ideally likes to have one hour with each new patient. The current payment method makes that impossible. To make matters worse, the costs of maintaining a medical practice have continued to rise. Doctors are truly squeezed.

Second, doing “stuff” pays better than not doing anything. “Well”, you might say “that only makes sense. Nobody gets paid for doing nothing.” And, I’m not suggesting some kind of welfare plan for doctors but what I am saying is as long as physicians are paid solely on the basis of “production” rather than some measure of health outcome, unnecessary procedures will be performed, people will suffer needlessly, and costs will escalate. Doing the right thing, rather than something should be rewarded.

Finally, some important aspects of care management either pay the physician very little or nothing. Time spent in coordination of care with specialists and counseling patients regarding self-management and healthy behaviors just aren’t worth it for many physicians. In fact the current payment scheme penalizes some kinds of doctors and patients with certain diagnoses. The most egregious example is payment for mental health service. In honest moments, most doctors will tell you that mental health problems are a huge portion of their practices. Certainly, for those costly chronically ill patients, mental health services are critical but they are so poorly funded that many psychiatrists don’t even accept insurance; they only treat those who can afford to pay.

Is there a way out of this quagmire? Perhaps, but that will have to wait until next time.