Your health plan’s Toyota complex

By Ford Vox
February 25, 2010

 Ford Vox is resident physician at Washington University School of Medicine’s neurology department.

– Ford Vox is a medical journalist and a physician. The opinions expressed are his own.–

A trade group by the name of America’s Health Insurance Plans began the week with oddly revealing rhetoric against a key proposal under debate at the health care summit today – controlling insurance premium hikes. Obama’s proposal “would be like capping the prices auto makers can charge consumers, but letting the steel, rubber, and technology manufacturers charge the auto makers whatever they want,” said Karen Ignagni, AHIP’s president.

Ignagni’s analogy shifted blame onto doctors and hospitals — the rubber and whatnot — but her analogy is apt in one way – we’ve got to pay attention to where the rubber hits the road. Relying on face-to-face relationships and earned trust, doctors are better poised to control costs than any federal agency or insurance company. Family practice doctors, who wield the referral, are the key to reigning in the excessive outpatient specialist care that accounts of much of the waste in American medicine. But they need some skin in the game.

University of Manchester researchers followed UK private practices and chronicled the power shifts that occurred after the roll out of the 2004 National Health Service contract, which was designed to allow family doctors to reap financial rewards by proving they’re keeping their populations healthy. U.S. legislation can similarly require that whatever fund is paying the bill (private, Medicaid or Medicare) hand over more control to the doctors on the front lines by designating more administrative responsibilities, and the dollars that go with them, to physician practices.

The National Committee for Quality Assurance has already laid some foundations, getting primary care physician organizations on board with the concept of the medical home, so that primary doctors will adopt outcome measures and accepted processes that are known markers of quality and that keep costs down.

Now is the time to give this program teeth. Let’s legislate such programs and mandate that significantly more insurance dollars (government and private) go where the rubber hits the road.

The pressing shortage of primary care doctors requires a power shift in American medicine away from sub-specialization towards physician management of medical homes. Eric Campbell, director of health policy research at Massachusetts General Hospital, says doctors already follow the bottom line. “We incentivize physicians to go into these sub-specialties because we pay them a tremendous amount of money, more than we pay family docs and pediatricians. It’s just the way it is,” he told me.

How can anybody say that doctors don’t have business sense, when not only do most American physicians forge their way in small private practices, but new doctors lay their cards on the table every year? The competitiveness of residencies, where doctors train to become a pediatrician or a cardiologist, correlates strongly with the field’s earnings potential. I’ll go on record: dermatology, a perennial application magnet, is not really that much more interesting than everything else, but “managing hyperfunctional facial lines” (i.e. Botoxing wrinkles) pays well.

In many specialties doctors often take on management roles. Rehab doctors lead rehabilitation hospitals, surgeons lead surgery centers, kidney doctors lead dialysis groups, and so on. But family doctors are leading the march out of medicine altogether. It’s time to boost the rank and responsibility of primary care physicians by handing them the source of insurance company power – the money.

In the current market, individual health plans digest over a third of premiums before spending a penny on health services, while group health insurance may deduct 15 or 20 cents on the dollar for expenses and profits. Robert Reich, the former labor secretary, says the lack of competition in the monopolized insurance market explains much of the price gouging. I’m sure he’s right. But instead of splitting delusional empires into self-important fiefdoms, let’s redefine this industry into low risk fund managers, and let actual physicians do the health care management.

Toyota isn’t blaming its engineers for its debacle. The auto maker says its zeal toward growth got in the way of the fundamentals. If we’re going to pull off a successful recall of American health care, we must accord more authority, and less blame, to the engineers and mechanics who make it all go.

One comment

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I agree. Companies will always try to maximize profit and growth. Only competition and controls (specifications and controls on quality) limit what these companies do. It is clear that the health care industry cannot govern itelf. Also this is true for the banking industry and the auto industry. Might even work for the trial lawyers to have some rules.

Posted by fred5407 | Report as abusive

[...] notes that doctors, indeed, have tremendous business sense: How can anybody say that doctors don’t have business sense, when not only do most American [...]

[...] notes that doctors, indeed, have tremendous business sense: How can anybody say that doctors don’t have business sense, when not only do most American [...]

[...] notes that doctors, indeed, have tremendous business sense: How can anybody say that doctors don’t have business sense, when not only do most American [...]