Optimizing Physician Payment for a Single-Payer Healthcare System

Abstract

Current forms of payment of independent physicians in U.S. health care may incentivize more care (fee-for-service) or less care (capitation), be inequitable across specialties (resource-based relative value scale [RBRVS]), and distract from clinical care (value-based payments [VBP]). Alternative systems should be considered as part of health care financing reform. We propose a “Fee-for-Time” approach that would pay independent physicians using an hourly rate based on years of necessary training applied to time for service delivery and documentation. RBRVS overvalues procedures and undervalues cognitive services. VBP shifts insurance risk onto physicians, introducing incentives to game performance metrics and to avoid potentially expensive patients. The administrative requirements of current payment methods introduce large administrative costs and undermine physician motivation and morale. We describe a Fee-for-Time payment scenario. A combination of single-payer financing and payment of independent physicians using the Fee-for-Time proposal would be simpler, more objective, incentive-neutral, fairer, less easily gamed, and less expensive to administer than any system with physician payment based on fee-for-service using RBRVS and VBP.