Do Doctors Deserve to Be Paid Less?

I'm listening to the New Yorker's political podcast, with Ryan Lizza and James Surowiecki discussing health care reform and one of them (Lizza?) makes the perfectly obvious point that if we're going to dramatically change the way we pay for health care, we'll likely have to dramatically change the way we pay the people providing us the care: that is, doctors. Obama has said as much, calling on law makers to "change the warped incentives" that reward doctors for the number of operations they do. But how exactly do we create incentives for doctors to earn less?

First, let's consider how much American doctors are paid. The answer is: a lot, by international standards. Here's one look, via an old Ezra Klein post:

As of 1996, the annual average income of American physicians was twice Canada's, thrice France, and almost four times the UK. And, as nobody needs to be reminded, the Canadians and French and Brits all live longer than Americans.

But how exactly do you change the "warped incentives" in a way that doctors find acceptable? Changing incentives is something of an expertise -- or at least, fixation -- of the Obama administration. His style isn't to mandate changes from on high but to tweak and nudge incentives to make individual actors find selfish reasons to choose to follow his agenda. Here was my Jennifer Aniston Theory of Obamaism:

Obama's agenda lays out it goals clearly, but it also gives us space, because it wants us to choose its agenda. It wants private investors to choose to buy the toxic assets. It wants private insurers to choose prevenative care. Obama doesn't want to do the dishes. He wants us to want to do the dishes.

How do you get doctors to want to want to make less money? Confession: I have no idea. As Ezra suggests, Obama could propose to subsidize medical education in exchange for lowered pay to keep doctors from sinking into debt after graduation (seems a bit heavy handed), or he could allow more nurse practitioners. We could offer a public option that paid doctors by patients, closer to what they do in the UK, instead of by procedure to discourage over-treatment and then find a way to shelter them from law suits to encourage docs to take the pay cut. That latter part could be a bit dangerous. Or we could work incrementally away from overprescription by emulating the Mayo Clinic, which pays doctors a fixed salary to encourage doctors not to maximize their patient load or overprescribe. I could try to go on, but I won't, because other people certainly have better ideas for limiting doctor pay and because limiting doctor pay is going to be like pulling teeth from a jungle cat.

Ultimately, like so many other aspects of our health care crisis, high doctor salaries is just another impacted tooth: easy to put your finger on, awfully sensitive, and damn near impossible to extract without a lot of yelling.

This article available online at:

http://www.theatlantic.com/business/archive/2009/06/do-doctors-deserve-to-be-paid-less/19521/