Patients, Doctors, and Governments

The National Health Service decided to do a survey of how well general practitioners in the U.K. are complying with pay-for-performance guidelines, and Health Affairs reports that the GPs surprised government authorities with a 91% compliance score.

But it’s not surprising if you believe in incentive economics: The docs received points for following the clinical guidelines, and each point earned a financial bonus that could allow doctors to boost their salary by as much as 30%.

You’d think politicians would be happy, but they were not. They hadn’t budgeted for such high compliance, and the promised extra money means they need to boost spending in this part of the NHS global budget by 20%, or $1.8 billion.

Martin Roland, an adviser to the U.K. program, told Health Affairs: “I think the response has been, to some extent, dismay by health authorities because the amount they’ve needed to pay over the budgeted amount is essentially unplanned-for.”

This seems to say that what matters most to politicians in a single-payer system is money, with quality maybe later.

And patient satisfaction was not one of the things rewarded on the British survey.

The reason, according to Roland – and this wins our award for quote of the week: The British Medical Association “thought that the notion that physicians were essentially running a service industry where the customers’ views mattered would be quite hard for the doctors to adjust to.”

Oh dear.


And then there’s the U.S., where a new Rand/UCLA study suggests doctors may care more about making their patients happy than following clinical guidelines.

Columnist David Wessel reports in The Wall Street Journal that the study shows the theory of consumerism in health care falls flat.

A survey of 236 elderly patients found that 9 in 10 were happy with the quality of care they received and said their doctors listened to them. Then the researchers developed quality measures to see if patients were getting recommended medical care, like aspirin after a heart attack, and found only about half were.

Wessel concludes that “confusing high scores on patient-satisfaction surveys with high-quality medical care can be dangerous to your health.”

While certainly there is ample room for clinical improvement, it would be equally dangerous to conclude that patients are dolts when it comes to making decisions about their medical care and that their opinions shouldn’t matter. Numerous studies show that the more informed and engaged people are in their health care, the better the outcomes, and a patient-physician partnership is critical to this success.


Kudos to California Gov. Schwarzenegger for signaling he will veto the legislature’s bill to create a single-payer health care system for the state.

“Socialized medicine is not the solution to our state’s health care problems,” he said.

“This bill would require an extraordinary redirection of public and private funding by creating a vast new bureaucracy to take over health insurance and medical care for Californians – a serious and expensive mistake. Such a program would cost the state billions and lead to significant new taxes on individuals and businesses, without solving the critical issue of affordability.”

Amen. It’s as true for California as anywhere.


We were sad but not surprised to learn that Mark McClellan has decided that, in early October, he will move on from his post running the Centers for Medicare and Medicaid Services. Mark testified this Wednesday before our Medicaid Commission (where he said that as soon as you announce you are leaving, “people start talking about you in the past tense”), and he won high praise from commission members representing all parts of the health sector.

Commission member Gwen Gillenwater said members of her American Association of People with Disabilities will never forget Mark’s coming to one of their meetings on a Sunday and staying until he had heard the concerns and ideas of each person there. Mark listens to everyone and is respected across the political spectrum.

President Bush said in a statement that Mark “played an instrumental role in transforming the nation’s health care system, and his efforts will continue to make a difference for generations.” So true. Mark worked to help conceive key elements of the Medicare Modernization Act and then took that new legislative authority to implement its new provisions to make Medicare more patient-centered, efficient, and innovative.

The Washington Post says that Mark plans to return to academia or a Washington think tank (our bet is AEI). But wherever he goes, you will continue to hear from this transformative health care leader. Well done, Mark.

Grace-Marie Turner


  • Transforming health care: A consumer-centered model takes hold in the information age
  • National surveys of pharmacists and physicians: Findings on Medicare Part D
  • Cutler and colleagues say U.S. health care cost-effective
  • Southern border without doctors
  • Home remedy

Source: URAC, 07/13/06

URAC, an independent, non-profit organization that promotes health care quality through its accreditation and certification programs, quotes the Galen Institute’s Grace-Marie Turner in an issue brief on consumerism in health care that emphasizes the role of better information in helping consumers to make wise choices. “Consumers aren’t used to acting like consumers when it comes to their health care because the system has encouraged a ‘mother, may I?’ kind of attitude,” said Turner. She noted that Health Savings Accounts provide new options to empower consumers, but there is an “information gap in the health sector?When people buy a car or a computer, they can comparison shop and look at prices and features. It’s very hard to do that in health care.” Several companies and the federal government are coming forward with solutions, but much more needs to be done.
Full text (pdf):

Grace-Marie Turner will be a keynote speaker at URAC’s 7th Annual Quality Summit and Exhibit on October 12, 2006 in San Diego, California. Her presentation will focus on “The Role of Consumerism in Redesigning Health Care Delivery.” More information is available on the URAC website at

Source: Kaiser Family Foundation, 09/07/06

“Substantial majorities of pharmacists (86%) and physicians (71%) believe that the prescription drug law is helping people on Medicare save money on their medications,” two new Kaiser Family Foundation surveys find. But they also said that 9 in 10 of them thought the new law was too complicated. Pharmacists were clearly a better resource for patients trying to make decisions: “Overall, pharmacists feel better informed and report having more experience with the Medicare prescription drug benefit than doctors,” but independent pharmacists had many more frustrations than those at chain drug stores. While many pharmacists admit that the drug benefit is confusing and causes administrative and financial problems, 59% think implementation of the benefit has improved over the past few months.

The majority of physicians agree that the benefit helps people on Medicare save money and think they have a responsibility to advise patients about the Medicare drug plans but say “they do not understand the Medicare prescription drug benefit well themselves.” Many doctors think the benefit is too complicated, but 65% have not used or the Medicare telephone hotline as a source of information and 69% are not familiar with the formularies for their patients’ plans.
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Author: Ryan Z. Cortazar
Source: Harvard University Gazette, 08/30/06

Analyzing health and spending trends from 1960 to 2000, researchers from Harvard University and the University of Michigan found “that health care in America has been cost-effective on the whole,” reports the Harvard University Gazette. Improved health care is responsible for 50% of the seven-year increase in life expectancy since 1960, and the researchers estimate that each added life-year costs an estimated $19,900. This is a good value when compared “against the value of a year of life as defined by insurance companies and medical decision makers – a figure that ranges from $50,000 to $200,000,” they find. The elderly, however, “have increased their longevity by just 3.5 years since 1960, with a cost of $84,700 for each year of added life.” But they say that the elderly have greatly increased their quality of life, which “mitigates in favor of current levels of health care spending among the elderly.”
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Author: Nadeem Esmail
Source: National Review Online, 09/06/06

The Canadian government’s management of the physician supply has lead to a decline in physician access and provides a reminder that “central planning typically does far more harm than good,” writes Nadeem Esmail of Canada’s Fraser Institute. Government restrictions on physician supply were introduced in the early 1990’s and had the unintended consequences of increasing Canada’s reliance on foreign-trained physicians and reducing access to health services. “One of the key problems was that the plans laid out for Canada’s physician supply in the early 1990s were based on the realities of medicine in the early 1990s,” writes Esmail. “Since then, the ability to treat patients has progressed significantly, the age of the population has also advanced, and people’s expectations have also grown along with the medical possibilities.”
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The Home Depot Business Toolbox: /


Medicare and Medicaid Conferences & Long-term Care Workshop
America’s Health Insurance Plans Events
September 10 – 14, 2006
Washington, DC

For additional details and registration information, go to:

Risks and Rewards: Innovations in Health Care
Oregon Health Forum Conference
Tuesday, September 12, 2006, 7:00 a.m. – 4:30 p.m.
Portland, OR

For additional details and registration information, go to:

My Health. My Medicare.
Centers for Medicare & Medicaid Services Fall Campaign Kickoff
Wednesday, September 13, 2006, 2:00 p.m.
Washington, DC

For additional details and registration information, contact Lauren Block at

National Consumer Driven Healthcare Summit
September 13 – 15, 2006
Washington, DC
Grace-Marie Turner will present Consumer Driven Healthcare: Is It the Answer? on Friday, September 15. For additional details and registration information, go to:

Managed Care Risk Association Conference
September 18 – 20, 2006
Colorado Springs, CO

Grace-Marie Turner will speak about Medicare managed care on Tuesday, September 19. For additional details and registration information, go to:

The Dangers of Undermining Patient Choice: Lessons from Europe and Canada
Galen Institute and Institute for Policy Innovation Briefing
Tuesday, September 19, 2006, 10:00 a.m. – Noon
Washington, DC

For additional details and registration information, go to:

Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features research and writings by participants in the Health Policy Consensus Group, articles of interest from the health policy world, and announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at

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