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   Doctors should be paid by salary, not fee-for-service, argue behavioral   
   economists    
   Date:    
   May 9, 2017    
   Source:    
   Carnegie Mellon University    
      
   Summary:    
   Researchers outline the problems associated with the fee-for-service   
   arrangements that most doctors currently operate under. Such compensation   
   schemes, they argue, create incentives for physicians to order more, and   
   different, services than are best for    
   patients.    
      
      
   FULL STORY    
   While most conflict of interest research and debate in medicine focuses on   
   physicians interacting with pharmaceutical and device companies, one important   
   source of conflicts is largely ignored in the medical literature on conflicts   
   of interest: how    
   doctors are paid.    
      
   In a Journal of the American Medical Association Viewpoint article, Carnegie   
   Mellon University's George Loewenstein and the University of California, Los   
   Angeles' Ian Larkin outline the problems associated with the fee-for-service   
   arrangements that most    
   doctors currently operate under. Such compensation schemes, they argue, create   
   incentives for physicians to order more, and different, services than are best   
   for patients.    
      
   "Fee-for-service payments have adverse consequences that dwarf those of the   
   payments from pharmaceutical companies and device manufacturers that have   
   received the lion's share of attention in the conflict of interest   
   literature," said Loewenstein, the    
   Herbert A. Simon University Professor of Economics and Psychology at CMU and a   
   leading expert on conflicts of interest. "Paying doctors to do more leads to   
   over-provision of tests and procedures, which cause harms that go beyond the   
   monetary and time    
   costs of getting them. Many if not most tests and procedures cause pain and   
   discomfort, especially when they go wrong."    
      
   One commonly proposed solution to the problem involves requiring physicians to   
   disclose their financial interest for a given procedure. However, disclosure   
   of conflicts has been found to have limited, or even negative, effects on   
   patients.    
      
   Loewenstein and Larkin argue that the simplest and most effective way to deal   
   with conflicts caused by fee-for-service arrangements is to pay physicians on   
   a straight salary basis. Several health systems well-known for high-quality of   
   care, such as the    
   Mayo Clinic, the Cleveland Clinic and the Kaiser group in California, pay   
   physicians salaries without incentives for volume of services performed.    
      
   Moving more physicians to straight salary-based compensation might have   
   benefits not only for patients, but also for physicians themselves.    
      
   "The high levels of job dissatisfaction reported by many physicians may   
   result, in part, from the need to navigate the complexities of the   
   fee-for-service arrangements," said Larkin, an assistant professor of strategy   
   at UCLA's Anderson School of    
   Management. "Instead of focusing on providing patients with the best possible   
   medical care, physicians are forced to consider the ramifications of their   
   decisions for their own paychecks."    
      
   Arthur L. Caplan, professor of bioethics at New York University's Langone   
   Medical Center, told Medscape that he found Loewenstein and Larkin's piece to   
   be "the most novel" in the May 2 JAMA issue dedicated to medical conflicts of   
   interest. In how they    
   suggest using salaried compensation as a remedy for conflicts of interest that   
   arise from fee-for-service incentives, Caplan said, "There's been a lot of   
   talk about this, but not much had been written."    
      
   Loewenstein and Larkin also led a research study in the same issue of JAMA on   
   how restricting pharmaceutical sales representatives' marketing tactics   
   changes physician prescribing behavior.    
      
   Story Source:    
      
   Materials provided by Carnegie Mellon University. Note: Content may be edited   
   for style and length.    
      
   Journal Reference:    
      
   Ian Larkin, George Loewenstein. Business Model–Related Conflict of Interests   
   in Medicine. JAMA, 2017; 317 (17): 1745 DOI: 10.1001/jama.2017.2275    
   Cite This Page:    
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   Carnegie Mellon University. "Doctors should be paid by salary, not   
   fee-for-service, argue behavioral economists." ScienceDaily. ScienceDaily, 9   
   May 2017. .   
      
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