In response to:
The Health Care Crisis and What to Do About It from the March 23, 2006 issue
To the Editors:
Paul Krugman and Robin Wells [“The Health Care Crisis and What to Do About It,” NYR, March 23] appropriately celebrate the Veterans Administration system and its “advantages of integrated health care.” Those advantages accrue for several reasons, the most important of which is that, unlike most of Medicare, the VA system of payment for and delivery of care is not fee-for-service. VA physicians, clinics, and hospitals operate under a set annual budget unrelated to the day-to-day nature and numbers of what is done in the way of diagnosis and therapy. Their doctors, nurses, and other clinicians do what they deem best for patients without worrying over whether any specific action will or will not be paid for by the government.
By contrast, Medicare—the dominant payment system in this country and predominantly fee-for-service—controls costs by ratcheting down payment for individual covered activities—office visits, operations, etc. Recently, for example, Medicare proposed an “update” for physician fees of minus 4.5 percent, using the rationale of “productivity.” Driven by the inherently inflationary nature of fee-for-service, that approach leads to (1) decreasing ability of physicians to cover their costs, (2) the tendency to increase throughput to stabilize income, that is, to see more patients but with less time for each, and (3) mounting unhappiness for both patient and physician.
It may be hard to swallow, since fee-for-service served reasonably well until recently, but without a change in this predominant paradigm of payment, efforts at reform of health care financing and delivery will not succeed. That is a sober fact this nation must confront.
Mitchell T. Rabkin, M.D.
Professor of Medicine Harvard Medical School