Why Doctors on Salary is Bad

This video provides an in-depth exploration of the potential negative consequences of compensating physicians solely on a salary basis, presenting a counterpoint to the argument that fee-for-service models are a public health threat. Dr. Eric Bricker, the speaker, shares feedback received from physicians who believe that a salary model can lead to suboptimal patient care and operational inefficiencies. He frames this discussion as a response to his previous video advocating against fee-for-service, demonstrating an open-minded approach to differing perspectives within the healthcare finance landscape.

The presentation details five primary reasons, articulated by physicians themselves, for why a salary model can be detrimental. These reasons highlight human behavioral tendencies that emerge when financial incentives are decoupled from productivity or patient volume. Dr. Bricker explains how physicians might respond to a salary structure by reducing their workload, being unwilling to extend hours for patient care, or "dumping" patients onto other specialists or shifts to avoid personal responsibility. He provides specific examples, such as the common practice of shifting a kidney infection patient from urology to interventional radiology during off-hours, or the strategic "blocking" of hospital beds and admissions.

Furthermore, the video addresses the impact on patient access, noting that salaried physicians might manipulate their schedules, such as not filling cancelled appointment slots, thereby increasing wait times for other patients. A significant point raised is the potential for a "bias toward doing too little" for the patient under a salary model, which stands in stark contrast to the criticism that fee-for-service incentivizes "doing too much." Dr. Bricker concludes by drawing parallels between these physician behaviors and those observed in salaried employees across other industries, including the military. He posits that the solution lies in implementing rigorous performance review processes for physicians, similar to the stringent evaluations seen in military advancement, which are largely absent in current medical practice.

Key Takeaways:

• Physician Behavior Under Salary: Physicians on salary may exhibit behaviors such as reduced work effort and unwillingness to stay late to see patients, driven by the lack of direct financial incentive for additional work. This can lead to decreased overall productivity and patient throughput.
• "Patient Dumping" Phenomenon: A significant concern is the tendency for salaried physicians to "dump" patients, meaning they refer or transfer patients to other specialties, departments, or shifts to avoid personal responsibility or workload, potentially impacting continuity of care and efficiency.
• Decreased Patient Access and Increased Wait Times: Salaried compensation can lead to operational inefficiencies, such as physicians strategically leaving cancelled appointment slots open rather than filling them, resulting in longer wait times and reduced access to outpatient care for patients.
• Bias Towards "Doing Too Little": In contrast to the fee-for-service model which is often criticized for incentivizing excessive procedures, a salary model may create a bias where physicians are incentivized to "do too little" for patients, potentially impacting the comprehensiveness of care.
• Physicians as Human Actors: The video emphasizes that physicians, like employees in any other salaried workplace, are subject to human behavioral dynamics and incentives. Their responses to compensation structures are not unique to the medical field but reflect broader workplace psychology.
• Lessons from Military Performance Reviews: The military's system of incredibly stringent and detailed performance reviews for advancement (e.g., to major, colonel, general) is presented as a potential model for evaluating physician performance. This framework highlights the importance of robust evaluation mechanisms.
• Absence of Rigorous Physician Performance Reviews: A critical observation is the general lack of a comprehensive and rigorous performance review process for physicians in current healthcare systems, which allows negative behaviors associated with salary models to persist unchecked.
• Recommendation for Performance Review Implementation: The speaker strongly advocates for the implementation of a rigorous performance review process for physicians, suggesting that these evaluations could potentially be conducted by other physicians to ensure peer-level accountability and understanding.
• Operational Challenges in Healthcare Delivery: The discussion underscores inherent operational challenges within healthcare delivery related to physician scheduling, workload management, and patient flow, which are influenced by compensation models.
• Implications for Healthcare Technology: While not explicitly stated, the challenges highlighted (e.g., scheduling inefficiencies, patient flow, performance tracking) suggest opportunities for AI and data engineering solutions to optimize operations, enhance scheduling, support performance metrics, and improve patient access within healthcare settings.

Tools/Resources Mentioned:

• Book: "Boyd: The Fighter Pilot Who Changed the Art of War" (by Robert Coram, implied as the biography mentioned) – referenced for its detailed account of the military's performance review process.

Key Concepts:

• Fee-for-Service: A payment model where services are unbundled and paid for separately. In medicine, it gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, not the outcome.
• Salary-Based Compensation: A payment model where physicians receive a fixed income regardless of the number of patients seen or procedures performed, potentially leading to different behavioral incentives.
• Patient Dumping: The practice of transferring or referring patients to other providers or departments to avoid responsibility or workload, often driven by incentives or disincentives in compensation models.
• Performance Reviews: A formal assessment in which a manager or supervisor evaluates an employee's work performance, identifies strengths and weaknesses, offers feedback, and sets goals for future performance. The video argues for their critical role in physician accountability.

Examples/Case Studies:

• Kidney Infection Patient Routing: An example of patient dumping where a patient with a kidney infection might be seen by urology during the day for a stent placement, but by interventional radiology at night or after hours to avoid the urologist's extended commitment.
• Blocking Beds/Admissions: The practice of strategically managing hospital bed availability or admissions to control workload, which can be influenced by physician compensation models.
• Manipulating Cancellation Slots: Salaried physicians might intentionally leave cancelled appointment slots unfilled to reduce their patient load, rather than using them to see other patients, leading to increased wait times.
• Military Performance Review Process: The highly structured and demanding performance review system within the military, used for advancement and career progression, is presented as a benchmark for how rigorous evaluations could be applied to physicians.