Performance Based Pay and the American Healthcare System

America's healthcare system differs greatly with that of other countries, namely in its system of performance based pay. In this system, doctors are paid based off of how many patients they see, how many operations they conduct, etc. However, this system is extremely flawed and the benefits are not expansive. 

One problem is that physician treatment and performance simply do not change drastically due to monetary incentives. Studies have shown that while marginal increases in performance can be correlated with performance based pay, the difference is usually around 5%. Furthermore, the amount of patients who do not receive the proper help are still great in number, an issue that performance based pay is unable to address. Other studies show that in the long term, these benefits disappear, an issue as studies that analyze the systems benefits are only conducted for a single year. 

Additional studies have looked into the healthcare system, and what they find is that often times, other factors are the cause in better performance. These factors include hospitals organizations and governmental groups reporting a hospital's performance. This spurs hospitals to improve their performance, a fact admitted by hospital administrators to the RAND corporation. The reality is that the benefits that are linked to performance based pay in the healthcare system are often times caused by other factors well beyond the scope of the system. 

The issues go beyond just the system's ineffectiveness and into how it can be harmful.The main problems seen are the harms that come with performance based pay. When doctors are given salaries based on their performance, they end up choosing to only help patients with a high chance of success. This means that patients who actually need help won't receive help. Physicians end up trying to cheat the system to earn more money, which the system itself allows. 

The reality is that performance based pay doesn't address the main issues within the healthcare system and causes a great deal of harm. At the end of the day, skill and performance are not the only factors that influence whether or a not a patient will be benefitted. Certain demographics are more susceptible to being harmed by a certain disease, and no amount of physician effort will change this fact. Punishing physicians based on who they choose to help and how many people they help is counter productive and creates a system where the patient are the ones being harmed. 


Sources : 

https://www.nytimes.com/2014/07/29/upshot/the-problem-with-pay-for-performance-in-medicine.html
https://www.healthaffairs.org/do/10.1377/hpb20121011.90233/full/
https://www.statnews.com/2018/01/30/pay-for-performance-doctors-hospitals/


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