Fee-for-service is a major medical problem

I am a Canadian family physician, but in the 1980s, I worked in South Dakota. The term “Medicare” in the United States refers to the administration and payment of health care by the U.S. government for people age 65 and over.

Before 1986, the U.S. government would pay hospitals on an à la carte basis for services to Medicare recipients. It was common practice for physicians to admit healthy people to the hospital and subject them to a vast battery of tests and procedures. This would be paid for on a fee-for-service basis.

Government did not closely scrutinize whether the service provided was worth the money paid out. Physicians would get handsome kickbacks from hospitals to admit people and took advantage of the naïveté of the government.

In 1986, then-president Ronald Reagan changed how hospitals would be reimbursed for Medicare patients. Instead of paying on a fee-for-service basis, the government instituted diagnostic-related groupings (DRG) and decided to pay hospitals a single fee based on the principal diagnosis of a patient admitted.

In 1985, average hospital occupancy in the United States was 95 per cent. In 1987, one year after the institution of the DRG program, hospital occupancy fell to 45 per cent.

Thousands of U.S. hospitals went bankrupt. This was because the payer finally got wise to what was happening with the fee-for-service system. Billions of dollars were saved and the quality of health care dramatically improved for people over 65.

In B.C., your family physician is paid on a fee-for-service basis. The provincial government writes me a cheque every two weeks with a detailed list of the services I have provided. I can provide a worthwhile service or I can provide a nonworthwhile service, but I am paid the same amount.

It is common practice in B.C. for family physicians to work in walk-in clinics and see 50 people in less than four hours and generate billings of $2,000 in that time, with no analysis of whether the service provided was beneficial or needed.

Some family physicians in B.C. will see people frequently to renew prescriptions without actually discussing their medical situation.

These physicians sometime have designated “prescription refill chairs” in their offices. If the patient wants a prescription refill, she or he simply comes into the office and if the chair is vacant, they occupy it.

The medical office assistant writes the prescription to be refilled and the physician signs it without talking to the patient. The physician then bills the government for an office visit.

Time to generate billing? Probably 30 seconds. The patient seems happy and the physician is definitely happy, but has a worthwhile service been provided?

Under the system of fee-for-service payment in B.C., some family physicians’ gross billings exceed $800,000 per year. It is hard to imagine how they can do this without resorting to the sort of practices I have described.

The Medical Services Commission should learn from Reagan, scrap the fee-for-service billing system and institute a more reasonable and rational system, such as exists in other parts of Canada. Unfortunately, the commission does not appear to be looking at this problem seriously. This is unfortunate for the people of B.C. who are struggling with inadequate primary-care services.

I have several patients from Ontario and have talked with several physicians from Ontario where primary care is not under a fee-forservice system. Physicians and patients seem much happier with that system. In that province, most physicians are paid under a system of rostered care. This system somewhat resembles Reagean’s DRG system.

Ontario physicians receive an annual capitated payment to provide services and are held accountable to meet certain standards of care. Patients are assigned to large “medical homes” where they go for all their primary-care needs.

I can function quite well in a feefor-service world. I know that I am a good doctor and provide good care. I am given a reasonable reimbursement for what I do. I am 66 years old and won’t practise much longer.

I do, however, have the experience and diverse medical background to fully understand the problems and shortcomings of our present healthcare system. Paying family physicians by the antiquated fee-for-service system is one of our biggest problems.

Dr. Robert H. Brown is a physician who lives in North Saanich.