Hospitals, Policy

Poor quality, not bundled payments, is the real problem

It doesn’t get more ignorant than this headline that appeared on the KevinMD blog Wednesday: “Bundled payments means the death of quality medical care.”

Hate ignorance in medicine? It doesn’t get more ignorant than this headline that appeared on the KevinMD blog Wednesday: “Bundled payments means the death of quality medical care.”

Cardiologist and author Dr. David Mokotoff penned that entry. He had some legitimate reasons for not liking the Centers for Medicare and Medicaid Services’ plan to mandate bundled Medicare payments for hip and knee replacements in 75 markets starting in 2016. Money was his primary gripe, but Mokotoff also worried that the plan is too close to the HMO capitation strategy that fell out of favor around the turn of the millennium.

Mokotoff suggested that the CMS strategy will trigger a race to the bottom.

Under bundled payments two providers, the hospital and the physician are being paid for the procedure or hospitalization. Most proposals have advocated the set bundled payment going to the hospital, and then they pay the doctors. So if Dr. A charges $5,000 for a total hip replacement, and Dr. B charges $2,500, which one do you think they will pick to do all of their surgeries? Now charging more does not necessarily insure high-quality medicine. However, bottom bidding and below cost pricing is almost a guarantee for poor medical care.

Mokotoff cites anecdotal evidence to support his “almost a guarantee” claim. The actual evidence is far murkier.

“If hospitals are in charge of doling out Medicare dollars to physicians, they will always go to the lowest bidder in order to increase their bottom line,” Mokotoff said. That may be mostly true, but certainly not “always.” There are few absolutes in healthcare.

“The fact that many doctors are now owned by hospitals makes physicians’ power to refuse these contracts almost impossible,” he continued.” Also true.

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Then Mokotoff concludes: “The real loser here will be the patient who will have to search even harder and pay extra money for better quality care.”

That’s laughable. It’s been barely a week since the Institute of Medicine said that the majority of Americans would suffer harm due to a diagnostic error at least once in their lifetimes. Medical error is the third-leading cause of death in the United States, according to a 2013 study.

Other research has shown that there is little correlation between cost and quality. But it’s easy to scare people by suggesting that lower-paid physicians are bad. It’s ignorant — perhaps even dangerous — to link payment levels to the “death of quality medical care,” given that quality medical care is so rare to begin with.

Photo: Flickr user Shawn Rossi