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Capitation, Rationing, The Rain, The Park, and Other Things

Kelley Beloff
recently published an important and fact-filled post on physician reimbursement: specifically,
fee-for-service vs. capitation.  I
think this is an extremely important topic on its own, and it’s also important
because it ties to many other key topics in medical delivery and finance –
e.g., utilization management and rationing.  I expect we will be seeing much, much more on these
topics.  Of course I can’t resist
adding my 2 cents.  (Well, it
started as 2 cents.  Sorry.)
The Irish playwright
George Bernard Shaw was the author of many sharp opinions in the late-19th
and early-20th centuries – opinions that often stung the comfortable
classes of his time, and can still make us moderns uncomfortable.  I
quoted Shaw when commenting on Kelly’s post about capitations:
“That any sane nation, having observed that you could provide for
the supply of bread by giving bakers a pecuniary interest in baking bread for
you, should go on to give a surgeon a pecuniary interest in cutting off your
leg, is enough to make one despair of political humanity.”
I think this insight
is noteworthy.  It comes from the
100-year-old diatribe that introduced Shaw’s play, “A Doctor’s Dilemma”.  Shaw’s point was that fee-for-service
payment is incentive for a physician to do more.  But doing more can also mean marginal or even unnecessary
services that, as Shaw vividly pointed out, bring unnecessary risk of injury to
the patient. 
We moderns find it
easy to accept fee-for-service, because it is predominant and familiar, and we
perceive it as normal; thus we tend to accept the personal risks that come from
medical treatment.   On the
other hand, we find it much easier to object to capitation – because we worry
that capitation provides incentive for our physician to skimp on treatment.  Thus we perceive personal risk from
receiving too little treatment ourselves. 
This worries us, even as we read research that shows too much treatment
is a general problem, not only for the public health but for the public purse,
too. The difference in how these reimbursement methods are perceived is
important to keep in mind when thinking about their pros & cons.  
Another commenter on
Kelley’s post took exception to my quoting Shaw, based on Shaw’s rather
repugnant ideas about what we today call medical rationing.  For example, Shaw said this:
“If you can’t justify your existence, if you’re not pulling your
weight in the social boat, if you’re not producing as much as you consume or
perhaps a little more, then, clearly, we cannot use the organizations of our
society for the purpose of keeping you alive.”
In the intro to
“A Doctor’s Dilemma” Shaw stated the same thing another way:   
“In legislation and social
organization, proceed on the principle that invalids, meaning persons who
cannot keep themselves alive by their own activities, cannot, beyond reason,
expect to be kept alive by the activity of others. There is a point at which
the most energetic policeman or doctor, when called upon to deal with an
apparently drowned person, gives up artificial respiration, although it is
never possible to declare with certainty, at any point short of decomposition,
that another five minutes of the exercise would not effect resuscitation. The
theory that every individual alive is of infinite value is legislatively
Note  “organizations of our society” in the first
citation, and “legislatively” in the second.  Shaw was talking about what we now call government rationing
of medical services. 
I think Shaw
advocated his position for the same reason that the Obama administration advocates
the same position.  That is, in order to have an affordable national
medical insurance scheme, there must be some reasonable way to control
spending.  Shaw concluded that to control spending the government must deny at
least some medical care.  The Obama
administration has reached the same decision. In other words, both concluded rationing is necessary. 
NHS rations more
explicitly, e.g., thru “NICE”.  Other countries ration less
explicitly e.g., the queue.  In the U.S. we have rationed largely on
price.  But you can be certain that
rationing explains why the Obama administration is trying to sell
Physician Advisory Panels as necessary under PPACA.   
Shaw advocated a
national medical insurance scheme in the U.K. 50 years before NHS
arrived.  He felt he had suggested a reasonable basis on which to deny
care.  This is a very uncomfortable subject.  But I ask you: 
how can a national medical insurance scheme succeed with limited resources,
if there is no limit to the expenditure of resources on anyone?  In other words without rationing, how
can any national medical insurance scheme be “legislatively practical” within
“the organizations of our society” – - to echo Shaw’s terms?   
Yet the issue before
Shaw was not simply financial.  It
was – and is - a moral and ethical issue, too.  This same moral and ethical
issue is present in today’s debate about the future of our medical care
system.  Advisers to the Obama administration such as Ezekiel Emanuel
(Rahm’s brother, btw) sound just as rational – and just as repugnant – as Shaw. 
However, it’s no use to pretend the rationing issue will not exist if we simply
ignore it, or to pretend we can safely disregard influential points of view
with which we disagree. 
If you are
interested, I highly recommend this article: “Principles for allocation of
scarce medical interventions” Govind Persad, Alan Wertheimer, Ezekiel J
Emanuel; Lancet 2009; 373:423–31.   A
link to this article is found within this earlierInsureblog post.  
Original content copyright © InsureBlog

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