The crossroads of pay for health care professionals

Here’s a post from my colleague Mike Caputo:

How could the direction of health care reform affect the pay and satisfaction of physicians and other clinicians, like nurse practitioners, in Minnesota?

Well, if the current proposal stands, and little change is done for compensation, then a glimpse might come from Mary, who is part of our Public Insight Network, and works for rural Minnesota health care organization (she didn’t want to publicize her last name or her place of employment because of the tenuous nature of her contract negotiations).

She gets paid a straight salary for her work as nurse practitioner. Mary’s contract is up for renewal, and they now want to pay her on a fee-for-service basis. Think of that as being paid on the volume of work she does, patients she sees and she procedures performed.

This bothers Mary.

“I will be expected to see more patients, work harder, stay later,” she says. “I hope I don’t drop dead in the process.”

Some who want to reform health care say the fee-for-service approach is the culprit for much of what ails the system. Institutions can earn more by seeing more patients more quickly or by performing more expensive procedures.

It’s an approach that Minnesota has traditionally gotten away from, says Dr. Doug Wood, the chairman of Mayo Clinic’s health care policy and research. Wood says Mayo and HealthPartners led Minnesota away from fee-based incentives and instead offered their providers salaries, sometimes with a bonus based on a measure of quality care, That departure has helped Minnesota become one of the lowest-cost states in the nation (look at this comparison of Medicare costs by the Dartmouth Atlas).

Steve Parente, director of the University of Minnesota’s Medical Industry, says Minnesota’s health care culture has traditionally been more “collectivist” than in other states. (Interestingly, Parente attributes this to the European influence of the long-ago immigrants to this state. It could also stem from the influence of agriculture in the state, says Dave Renner, director of policy development at the Minnesota Medical Association, which represents physicians.)

You might think Minnesota’s more collectivist approach would mean less money for docs, and perhaps fewer incentives for new physicians to move to the state. Wood said it was initially a struggle, but it’s become easier to attract younger doctors in recent years because they care more for lifestyle than compensation. And they gravitate to organizations where they don’t feel like a factory worker.

Which brings us back to Mary. She likes getting paid a salary, as does another Public Insight Network source, Philip Araoz, a radiologist at Mayo.

“I get paid the same as all radiologists regardless of what I’m performing,” says Araoz “I’m not encouraged to do more (procedures) just to do them.”

Mary’s experience raises the larger question of whether health reform will make the rest of the country’s health care system more like Minnesota. From what we can tell, the answer is no.

The actual legislation, at least the version approved by the House, only directs the Secretary of Health and Human Services to try some pilot programs where payments are based more on the quality of care than by the procedure.

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