Pearson et al. (Sept. 3 issue) (1) correctly warn that all methods of payment to physicians influence physicians' clinical judgment. But they wrongly portray current risk-sharing capitation arrangements as a mere inversion of fee-for-service payments.
British-style capitation (in which a physician receives a fixed monthly payment for his or her own work) is perhaps ethically akin to fee-for-service. But U.S.-style risk sharing is more analogous to fee-splitting, in which doctors profit from their power to refer. "Anti-kickback" laws ban the payment of physicians for care they prescribe but do not themselves deliver. Risk sharing amounts to a fee-for-nonreferral, the mirror image and ethical equivalent of the banned fee-splitting arrangements. A primary care physician who pockets $10 for each referral to a colleague is no different from one who pockets $10 by forgoing referral.
Disturbingly, the authors portray risk sharing of less than 10 to 20 percent of a physician's income as benign. For the average internist in 1995, a "withhold" of 20 percent of gross practice income would have amounted to $77,200 (2) -- 41.6 percent of net income (after practice expenses). Few patients would view as innocuous a bonus for withholding care equivalent to the cost of a Mercedes.
Steffie Woolhandler, M.D., M.P.H.
David U. Himmelstein, M.D.
Cambridge, MA 02139
Capitation, particularly when blended with direct financial incentives and withholds, transforms the physician from a care giver into a simultaneous insurer, care giver, and gatekeeper. The conflicting duties and obligations of these roles create an untenable, intolerable, and professionally stifling position.
Pearson et al. argue that physicians should assume some financial risk. Yet, financial-risk pools and direct incentives are particularly hazardous for physicians. The risk pool is intended to cover the likelihood of risk based on sound actuarial projections. If the same risk pool is used as the source of financial incentives -- that is, when the risk pool and the bonus pool are drawn from the same aquifer -- things get muddy and corrupted. Thus, capitation has a built-in incentive to undertreat and to delay and discourage treatment and access to care. For the physician who is paid by capitation, the insured life is an asset; the patient is a threat to profits, indeed, a financial liability, exhausting some of what the physician already has in his or her pocket. Capitation is intrinsically unethical because it creates incentives that can transform the physician from the patient's advocate to the patient's adversary.
I disagree that capitation is not going to go away and that adequate stop-loss insurance and lower capitation ratios are an antidote to the lack of trust, integrity, and accountability in health care. Moreover, an apologia for capitation is not even a step in the right direction to achieve this.
Dennis Robbins, Ph.D., M.P.H.
Loyola Medical Center
Maywood, IL 60153
Pearson et al. argue that only physicians in a capitated system face ethical dilemmas concerning their interests and those of their patients. Do they assume that in open-market or indemnity systems, no such conflicts exist?
Under capitation, physicians have obligations to their patients that do not exist in an open-market system. In a capitated system, a physician can be officially assigned to be a patient's primary care provider. That assignment conveys a responsibility to ensure quality and comprehensive care. How well this responsibility is dispatched can be measured through means such as Health Plan Employer Data and Information Set surveys, outcomes measures, and surveys of patients' satisfaction. Although these tools may be primitive or underused at present, they have no equivalent in fee-for-service systems.
Why do I so rarely see articles regarding the ethical dilemmas facing the fee-for-service physician?
Martin G. Neft, M.D.
Sutter Medical Group
Roseville, CA 95661
The managed-care companies have never understood the fundamental financial facts of medicine: costs can be reduced by limiting a physician's compensation, and costs can be reduced by making the provision of care more efficient (such as through the use of purchasing cooperatives, "best" practices, and case management); however, the only way substantially to affect what is spent on health care is by limiting the services that are provided. Only by rationing care, under whatever guise we want to use for political correctness, can costs be substantially reduced. Once the decision has been made to enter the maelstrom of withholds, incentives, and -- most deadly -- risk products, physicians become personally financially responsible for the expenditures their patients incur. Then, the patients need to be wary, since they bear the risk of harm because services are not provided.
James R. Criscione, Jr., M.D., M.P.H., J.D.
Lafayette Grand Hospital
St. Louis, MO 63104
A modest suggestion for mitigating the problem of incentives in physician compensation based on capitation: split the bonuses 50-50 with the patients. This will decrease the quantitative incentive ("intensity") to the physician to withhold services and give patients an incentive not to overuse services. The competent patient is, after all, the master of his or her own fate and the captain of the ship.
John D. Leith, M.D., Ph.D.
162 Islington Rd.
Newton, MA 02466-1012
To the Editor:
The letter writers' professional instinct to advocate for individual patients is palpable, and we agree with Drs. Woolhandler and Himmelstein and Dr. Robbins that capitation can pose very real moral hazards for physicians. But portrayals of capitation as inherently unethical, as analogous to fee-splitting, or as simple withhold schemes directed at individual physicians ignore the diversity and moral nuances of capitation agreements. Furthermore, they ignore the fundamental ethical problem facing our society of the need for fiscal accountability in health care.
Health care resources in our society are limited, and they are shared. Physicians decide how these common resources are used. Thoughtful capitation arrangements reinforce the corresponding ethical duty of physicians to use these resources wisely for the health of the population. Capitation can be structured poorly, magnifying financial conflict of interest in the day-to-day clinical decisions that physicians make. But is the only answer to ban all forms of capitation?
We find compelling arguments that all forms of capitation are not worthy of blanket condemnation. The aim of our article was to peel back the complex layers of capitation agreements and find the pressure points that are likely to influence physicians' clinical decisions in caring for individual patients. By paying attention to the scope and intensity of capitation incentives, and by using balancing features and safeguards, health plans can design morally defensible capitation agreements that can preserve patients' trust while fostering cost-conscious medical care.
As Dr. Neft points out, alternative forms of compensation for physicians carry their own potential risks for patients, and further study of the conflicts of interest inherent in fee-for-service and salaried practice is needed. Perhaps new safeguards and other ideas, like that of Dr. Leith to engage patients in efforts to use resources wisely, will be developed and tested among all these models.
Innovation in compensation systems is likely to continue, and it should be welcomed. As that innovation proceeds, we believe that continuing attention to the ethical distinctions that can be made among various components of compensation systems will help guide the design of systems faithful to physicians' professional duties and truly worthy of public trust.
Steven D. Pearson, M.D.
Harvard Medical School
Boston, MA 02115
James E. Sabin, M.D.
Harvard Pilgrim Health Care
Boston, MA 02215
Ezekiel J. Emanuel, M.D., Ph.D.
National Institutes of Health
Bethesda, MD 20892