Fixing Health Care Starts With the Doctors

By Steven Pearlstein
Wednesday, June 10, 2009

It's the doctors, stupid.

If we really want to fix America's overpriced and under-performing health-care system, what really matters is changing the ways doctors practice medicine, individually and collectively. Everything else -- mandate or no mandate, the tax treatment of health benefits, whether there's a "public plan" to compete against private health insurers -- is just tinkering at the margin.

I was reminded of this reality by a recent article in the New Yorker by Atul Gawande, a surgeon at Brigham and Women's Hospital and the Dana Farber Cancer Institute who somehow manages to find time to turn out deeply reported and elegantly written essays on health care. Like many health reformers, Gawande says the essential problem with the American health-care system is that so much of what we spend -- as much as a third of the $2.3 trillion spent in 2007 -- goes toward care that is either unnecessary or inappropriate. Fixing that is the first step to fixing everything else.

It is tempting to lay the blame for this enormous waste of resources on greedy drug companies or incompetent insurers or misguided government policies -- and surely all of these contribute to the system's high cost and disappointing results. We consumers also share some of the blame when we demand to have all the latest treatments, whether we need them or not, or when we fail to shop around for the best value, knowing that our health insurance plan will pick up most of the tab.

At the end of the day, however, it is physicians who have the greatest impact on the cost and quality of health care we get. It is the docs who drive the decisions on what tests are ordered up, what surgeries performed and what drugs prescribed. And it is around the doctors and their practices that the medical system is organized.

The problem comes when doctors' decisions about treatment aren't based on the latest scientific evidence about what works and what doesn't. More often than you'd think, such definitive evidence is not available -- and even when it is, many doctors are unaware of it. Instead, they fall back on what they learned in medical school or what they've always done in their own practice or what is customary among other physicians in their region.

There is also evidence that doctors' treatment decisions are colored by the financial incentives built into a fee-for-service insurance system in which the only way to earn more is to do more, whether it's needed or not. And, as Gawande discovered in talking to doctors in McAllen, Texas -- which has the dubious distinction of having the highest per-patient Medicare spending in the country -- that's particularly true when it is the doctors themselves who own the laboratory that does the tests or the hospital in which the surgery is performed.

The central challenge of health reform, then, is to make sure doctors have the scientific evidence about what works and what doesn't -- and then to change the way they work and realign their financial incentives so that this evidence guides their practice.

There are already successful models for doing this: the Mayo Clinic in Minnesota, Geisinger Health System in Pennsylvania, Intermountain Healthcare in Salt Lake City and Kaiser Permanente in Northern California, to name a few. What's common to all of them is that they have found ways to better organize and compensate doctors, hospitals and other providers so that they work as a team to provide comprehensive, high-quality patient care at the lowest possible cost.

In many of these organizations, doctors work for fixed salaries, with bonuses based on their success in adhering to "best practices," avoiding errors and keeping patients healthy.

In others, the doctors and hospitals operate as their own insurance plan, agreeing in advance to provide a specified range of medical services to a group of patients at a fixed annual fee.

In every case, the organizations have put a premium on preventing diseases rather than just treating them. And they have made extensive use of sophisticated software and computerized medical records to coordinate care, improve efficiency, avoid medical errors, and track the performance of individual doctors and departments in terms of both cost and quality.

These are the essential building blocks of health-care reform. They were the building blocks back in the 1970s, when the first health maintenance organizations demonstrated that a team of salaried doctors delivering "managed care" could keep people healthier at a lower cost than Blue Cross-Blue Shield. And they need to be the building blocks today as the country moves to restructure the private insurance market, slow the rate of spending growth and usher in an era of universal coverage.

Steven Pearlstein will host a Web discussion today at 11 a.m. at He can be reached at

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