WoD – Healthcare, Part III

I hope many of you happened to catch the President’s speech earlier tonight, regardless of which side of the political aisle you’re on.  Not because it was bad, or good; but because this is just such a darn important issue for decades to come.

One element of the whole discussion and plan still seems to predominate the debate — the issue of having the government offer a backstop type of health insurance.  I am not going to weigh in on whether this may be a good or bad idea.  It’s because, to me, we’re all still missing discussing one of the key issues or root cause.  It’s the elephant in the room.

And it is this: fee for service.

Essentially, our healthcare provision is based on this phrase or premise.  What it means is that providers (i.e. doctors, hospitals, clinics, etc.) get paid a fee based on the service, or amount of service, provided.  NOT based on quality or any real performance metrics like how you, me, and just about everyone we know are paid.  I am a big believer in aligning incentives and the old adage that, ultimately, people do what they are incentivized to do.  So applying that here, if you pay doctors based on amount of services provided, guess what you’re going to get: lots of services.  And the cost of this to our system is what makes ours one of the most expensive in the world.

If you recall that excellent New Yorker article from a few weeks back, the author had a really great quote on this whole issue.  I will quote it again here, since it sums up the problem so well:

“Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coordination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.”



A rebuff, a talking-to

He comes in late again, and I’m going to give him such a bagrob!*


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