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A Crisis of Volume and Cost

By Jennifer Tomasik MS

“Fee-for-service” has been the dominant financial dynamic in the US healthcare system for decades, whereby providers are reimbursed for the quantity of visits, tests, or procedures that are performed, often without adequate regard for the cost of the interventions relative to patient outcomes.

Atul Speaks

This focus has arguably fueled incredible advances in medical devices, diagnostic tests, pharmaceuticals, and other innovations. Atul Gawande MD, surgeon and author, describes how far medicine has come since the days before penicillin—when convalescence in the shelter of a hospital was the best of only a few treatment options and, therefore, “when what was known you [as a doctor] could know. You could hold it all in your head, and you could do it all.”

The surge in the number of diagnoses and treatments that physicians have access to today is transforming their profession from a field of autonomous craftsmen wielding basic tools to what Gawande suggests should be race-car like “pit crews” that together can deliver on the scientific promise of 4,000 medical and surgical procedures and 6,000 drugs.

A Double-Edged Sword

This is a double-edged sword, as the autonomous mentality on which the field developed is now often at odds with the machine-like functioning expected of an effective and efficient “pit crew.” Together with the fee-for-service incentive structure, these realities have collided in a perfect storm propelling tremendous growth in healthcare spending characterized by fragmentation and high volume, a high cost per episode, and inconsistent quality.

Assessment

And so, we are now witnessing the costly “failure of success” from focusing so extremely on “sick care” while ignoring “well care” attempts to keep individuals and populations healthy from the start.

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Filed under: Health Economics, Health Insurance, Health Law & Policy, Healthcare Finance | Tagged: Atul Gawande, Domestic Healthcare Change, fee for service, Jennifer Tomasik | Leave a comment »