Doctors’ Trilemma

These days independent doctors are feeling paranoid.

And for good reasons.

Congress refuses to provide a long-term solution to replace the draconian formula (SRG) to pay for Medicare. The new health care law blames physicians for rising costs by suggesting physicians ought to be herded into groups so they can be held accountable for costs. In other words, collectively legislators responsible for the unprecedented federal deficit distrust individual physicians to care for individual patients or the public at large cost-effectively.

And yet, directly or indirectly, Medicare already sets doctor fees, and health plans meekly follow suit. Merritt and Hawkins, in their book, Guide to Physician Recruiting, put it this way.

“Physicians rarely set their own fees. Their fees are dictated to them by Medicare, Medicaid, HMOs, PPOs, and other third party payments. The money reimbursed to them for services rendered may have little or no relation to their costs of doing business. What can be more aggravating is that sometimes third party payers also dictate what physicians can or can’t do for their patients, by declining to for services may believe their patients need…the Medicare regulatory codes by which doctors must abide is 130,000 pages long. Doctors must document just about everything they do or risk civil or criminal penalties for fraud.”

It should surprise no one that a doctor shortage looms. Why enter a profession where your pay is uncertain and where everyone second guesses what you do and your motives for doing so?

What are the physicians’ options? What is their leverage? I received a phone call from a primary care physician and asked him these questions.

He replied. “We only have three options. One, refuse to accept new Medicare or Medicaid patients or government payment for them. Two, drop all third party arrangements, and go into cash only or concierge practices. Three, push the hell out of health savings accounts with high deductibles, and pray HSAs catch on.”

Another potent lever is to keep preaching the gospel that a lack of doctors to serve the coming wave of Medicare and Medicaid patients will precipitate a political Armageddon. It will at last force politicians to pay attention to doctor discontent as doctors exit or young people do not enter the profession.
Unfortunately, with the forces arraigned against them, options for doctors, are not simple.

These forces constitute a trilemma. A trilemma is defined as three difficult options, none considered wholly acceptable or desirable, and all with upsides and downsides, usually with loss of doctor autonomy.

• The first option is the government option. Play along with the new law and pray for the best - the best being new rules and regulations, pressures to install money-losing electronic records, acceptance of thousands of new and shifting diagnostic and procedural codes, swallowing declining reimbursements, rationing of high tech, and herding into accountable care organizations, in which you will be paid by salary or within budgetary limits and not be fees for your services. This option assumes Big Brother knows best.

• The second option is the managed care or the corporate option. Allow yourselves to be “managed” by remote management professionals deploying a myriad of management techniques including check lists, protocols, evidence-based guidelines, standardized methods, and continuous improvement processes borrowed from industry and designed to improve efficiency, effectiveness, safety, and outcomes. This may come to be known as the Berwickian Option, a hybrid blend of government and management options. This option assumes health care is too important to be left to doctors.


• The third option, preferred by many physicians, is the free-market approach. This consists of Darwinian competition among providers setting their own fees and services , and individual consumers making their choices based on value (bang for the buck, better outcome ) and data-based information gleaned from the Internet and industry sources. Presumably Health 2.0 information technologies will make it possible for “empowered “ consumers to judge and separate good doctors and hospitals from bad and to choose between various practice models – small practices, multispecialty group practices, single specialty practices, practices of integrated health systems, hospital-based systems, off-shore and foreign hospitals and clinics, retail clinics, work site clinics, practices not accepting third party insurances but offering discounted fees and/or 24/7 personalized services. This option assumes doctors and patients are intelligent and sensible human beings, and acting together, will do the right things for the right reasons for the right price.

Only one thing is certain. Life and practice will never be the same. It may be better. It may be worse. But it may not be what physicians envisioned when they entered medicine.

To Sum Up

Physicians may salute government’s noble mission to cover all, but they deplore the bureaucratic and documentation gauntlet through which they must run to get there; they may acknowledge management’s role, but they question the methods and wisdom of those who are not there and who have never been there or done that; they may appreciate the power of free markets and free choice, but they know health is no ordinary Darwinian commodity.

When all is said and done, the trilemma will always loom large and will always be there.