Result-Based Compensation in Health Care: A Good,but Limited,Idea

Hyman D.A. Silver C. , “Just What the Patient Ordered: The Case for Result-Based Compensation in Health Care,” Journal of Law, Medicine & Ethics, 29, no. 2 (2001): 170–73, at 172.

Temple R. , “Are Surrogate Markers Adequate to Assess Cardiovascular Disease Drugs?,” JAMA, 282 (1999): 790–95;.

Psaty B.M. , “Surrogate End Points, Health Outcomes, and the Drug-Approval Process for the Treatment of Risk Factors for Cardiovascular Disease,” JAMA, 282 (1999): 786–90.

Feinstein A.R. , “Clinical Judgment Revisited: The Distraction of Quantitative Methods,” Annals of Internal Medicine, 1230 (1994): 799–805, at 801.

See also Bucher H.C. , “Users' guides to the medical literature: XIX. Applying clinical trial results. A. How to use an article measuring the effect of an intervention on surrogate end points,” JAMA, 282 (1999): 771–78.

Temple , supra note 2, at 792.

Psaty , supra note 2, at 787.

Feinstein , supra note 3, at 801.

Morreim E.H. , “Quality of Life: Erosions and Opportunities under Managed Care,” Journal of Law, Medicine & Ethics, 28, no. 2 (2000): 144–58.

Morreim E.H. , “The Impossibility and the Necessity of Quality of Life Research,” Bioethics, 6 (1992): 218–32;.

Leplege A. Hunt S. , “The Problem of Quality of Life in Medicine,” JAMA, 278 (1997): 47–50;.

Morreim E.H. , “Quality of Life in Health Care Allocation,” in Reich W.T. , ed. Encyclopedia of Bioethics (New York: Simon and Schuster, 1995): At 1358–61;.

Morreim E.H. , “Computing the Quality of Life,” in Agich G. Begley C. , eds., The Price of Health: Cost Benefit Analysis in Medicine (Dordrecht, Holland: D. Reidel Publishing Co., 1986): At 45–69;.

Testa M.A. Simonson D.C. , “Assessment of Quality-of-Life Outcomes,” N. Engl. J. Med., 334 (1996): 835–40;.

Coates A. , “Improving the Quality of Life During Chemotherapy for Advanced Breast Cancer,” N. Engl. J. Med., 317 (1987): 1490–95;.

Gill T.M. Feinstein A.R. , “A Critical Appraisal of the Quality of Quality-of-Life Measurements,” JAMA, 272 (1994): 619–26;.

Lehman A.F. , “Measuring Quality of Life in a Reformed Health System,” Health Affairs, 14, no. 3 (1995):90–101;.

Smith A. , “Qualms about QALYs,” Lancet (May 16, 1987): 1134–36;.

Guyatt G.H. Feeny D.H. Patrick D.L. , “Measuring Health-Related Quality of Life,” Annals of Internal Medicine, 118 (1993): 622–29;.

LaPuma J. Lawlor E.F. , “Quality-Adjusted Life-Years: Ethical Implications for Physicians and Policymakers,” JAMA, 263 (1990): 2917–21.

Hyman Silver , supra note 1, at 173, citing AMA Opinion 6.01.

Hlatky M.A. , “Patient Preferences and Clinical Guidelines,” JAMA, 273 (1995): 1219–20;.

Stevens C. , “Guidelines Spread, But How Much Impact Will They Have?,” Medical Economics, 70, no. 13 (1993): 66–89.

Nease R.F. , “Variation in Patient Utilities for Outcomes of the Management of Chronic Stable Angina: Implications for Clinical Practice Guidelines,” JAMA, 273 (1995): 1185–90, at 1189.

See also Fisher E.S. Welch H.G. , “Avoiding the Unintended Consequences of Growth in Medical Care: How Might More Be Worse?,” JAMA, 281 (1999): 446–53.

“In one study of 1000 medical outpatients, only 16% of symptoms had a documented organic cause and 10% were presumably psychological, leaving three of four complaints unexplained. Some of these physical symptoms of unknown cause probably reflect underlying psychiatric disorders, since ‘functional’ symptoms are frequent manifestations of depression, anxiety, and somatoform disorders. However, clinicians often fail to recognize psychiatric disorders when patients focus on somatic complaints.” Kroenke K. Price R.K. , “Symptoms in the Community: Prevalence, Classification, and Psychiatric Comorbidity,” Archives of Internal Medicine, 153 (1993): 2474–80, at 2474.

See also Barsky A.J. Borus J.F. , “Somatization and Medicalization in the Era of Managed Care,” JAMA, 274 (1995): 1931–34;.

Barsky A.J. , “The Paradox of Health,” N. Engl. J. Med., 318 (1988): 414–18;.

Katon W. , “Collaborative Management to Achieve Treatment Guidelines: Impact on Depression in Primary Care,” JAMA, 273 (1995): 1026–31.

As many commentators have observed, employees ultimately pay for their benefits, partly via co-insurance, but largely via foregoing higher wages and other benefits. Between 1980 and 1993, “private health insurance costs increased by 218 percent in inflation-adjusted dollars, while the inflation-adjusted gross domestic product per capita rose by just 17 percent.” Kuttner R. , “The American Health Care System: Employer-Sponsored Health Coverage,” N. Engl. J. Med., 340 (1999): 248–52, at 248. Between 1970 and 1989, “employer expenditures … for wages and salaries increased only 1%. … In contrast, employer spending for employee health benefits increased 163%.”.

Report to the Board of Trustees, AMA. “Direct Contracting with Employers: A Strategy to Increase Physician Involvement in the Current Health Care Market,” Board of Trustees Report, 27–A-95 (1995), at 1.

Such issues are familiar in the worker's compensation setting and could crop up under result-based compensation arrangements. Walsh D.C. , “Divided Loyalties in Medicine: The Ambivalence of Occupational Medicine Practice,” Social Science and Medicine, 23, no. 8 (1986): 789–96;.

Beckman H.B. Frankel R.M. , “The Effect of Physician Behavior on the Collection of Data,” Annals of Internal Medicine, 101 (1984): 692–96;.

Lipkin M. , “Sisyphus or Pegasus? The Physician Interviewer in the Era of Corporatization of Care,” Annals of Internal Medicine, 124 (1996): 511–13;.

Bloche M.G. , “Clinical Loyalties and the Social Purposes of Medicine,” JAMA, 281 (1999): 268–74.

Hannan E.L. , “Improving the Outcomes of Coronary Artery Bypass Surgery in New York State,” JAMA, 271 (1994): 761–66;.

Hannan E.L. , “The Decline in Coronary Artery Bypass Graft Surgery Mortality in New York State,” JAMA, 278 (1995) 209–13.

Green J. Wintfeld N. , “Report Cards on Cardiac Surgeons: Assessing New York State's Approach,” N. Engl. J. Med., 332 (1995): 1229–32.

As noted by Green and Wintfeld, after New York introduced a risk-rated system for evaluating the results of cardiac surgery in that state, “five risk factors in the CSRS [Cardiac Surgery Reporting System] model (renal failure, congestive heart failure, chronic obstructive pulmonary disease, unstable angina, and low ejection fraction) showed surprisingly large, sudden increases in prevalence during the study period.” Id. at 1230. “[T]he apparently spurious increases in risk factors … accounted for most (66 percent) of the increase in predicted mortality and thus for 41 percent of the total reduction in statewide risk-adjusted mortality.”.

Id. at 1231.

Hyman Silver , supra note 1, at 172.

Bischoff W.E. , “Handwashing Compliance by Health Care Workers: The Impact of Introducing an Accessible, Alcohol-Based Hand Antiseptic,” Archives of Internal Medicine, 160 (2000):1017–21.

Hyman Silver , supra note 1, at 172.

That is, the fact that one event follows another does not entail that the first caused the second.

Hyman Silver , supra note 1, at 172.

See id. at 171.

See id. at 171.

Lipson D.J. De Sa J.M. , “Impact of Purchasing Strategies on Local Health Care Systems,” Health Affairs, 15, no. 2 (1996): 62–76, at 75;.

Miller R.H. , “Competition in the Health System: Good News and Bad News,” Health Affairs, 15, no. 2 (1996): 107–20.

Harris H.M. , “Disease Management: New Wine in New Bottles?,” Annals of Internal Medicine, 124 (1996): 838–42, at 840–41;.

Miller , supra note 24, at 118.

Hyman Silver , supra note 1, at 172.

Green Wintfeld , supra note 16.

Hyman Silver , supra note 1, at 173.

Committee on Quality of Health Care in America, Institute of Medicine, Crossing the Quality Chasm: A New Health System for the 21st Century (Washington, D.C.: National Academy Press, 2001): Executive Summary, at 17–18.

In the end, result-based compensation arrangements may work best in the fairly narrow range of situations that roughly correspond to the cases that qualify for a res ipsa loquitur analysis: The interventional modality is under the exclusive control of the provider; the outcome does not ordinarily occur in the absence of the intervention; and the connection between the intervention and the outcome is so obvious that no expertise is required to discern it. See, e.g., Seavers v. Methodist Med. Cent. of Oak Ridge, 9 S.W.3d 86 (Tenn. 1999). “There are three elements that generally must be satisfied in order for res ipsa loquitur to apply. The injury must have: ‘(1) resulted from an occurrence which does not ordinarily occur in the absence of negligence, (2) [been] caused by instrumentality or agency under the exclusive management or control of the defendant, and (3) occurred under circumstances indicating the injury was not due to any voluntary act or negligence on the part of the plaintiff.’ Loizzo v. St. Francis Hosp., … 459 N.E.2d 314, 317 (1984).”.

King J.H. , The Law of Medical Malpractice (St. Paul: West Publishing Co., 1986): at 114.

Hyman Silver , supra note 1, at 172. It might be noted that even these cases can leave room for discussion, e.g., as to whether the goal and associated payment for in vitro fertilization will be a successful implantation or a live child. If the latter, the patient's role in promoting a healthy pregnancy may become an issue in some instances.

Parrish M. , “A New Day Dawns … When Patients Buy Their Own Health Care,” Medical Economics, 78, no. 5 (2001):95–111.