What Could Be Wrong


 Recently my wife had a minor procedure on her ear, the type children usually receive for ear infections. The procedure was done in an outpatient surgical center. From the time anesthesia was administered to the time the doctor told me everything was ok was about fifteen minutes. We will see what the bills are in a few days I suspect.

I was impressed with the facility, quite luxurious as a matter of fact. The waiting room was very comfortable and they even gave you free coffee. One of the nurses told me they do 40-50 procedures a day. If you have to have any kind of surgery this would be a place to pick. Who owns the Center I asked? Oh, fifty physicians invested and built it I was told.

Bingo, health care in the United States.

What other product or service can you think of where the provider largely controls demand once you enter the system, orders the level of service and has an incentive to utilize services at all levels? Would we tolerate an Exxon not only providing the oil and the gas stations but also determining the gas mileage on your vehicle and the number of mile you drive each year? Of course not and yet we accept the health care system as is.

If there is one system where fee for service reimbursement is a perverse incentive it is health care. We have all seen what incentives can do in the financial sector and mortgage industry and yet we still seem to think that financial incentives do not play a role in the health care we receive. Rather, we delude ourselves into believing that all those tests (sometimes duplicate) are necessary and that the health care we receive is all medically necessary.

It ain’t necessarily so.

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