Dr. Pearl has written:
Of course, when physicians and hospitals are rewarded for doing more (rather than doing better), that's exactly what they do. They buy and advertise multimillion-dollar surgical robots that barely move the needle on patient outcomes, and they recommend pricy treatments that often prove ineffective. In fact, a study found 1 in 4 health care dollars is wasted.
In contrast to fee-for-service, some of the nation's highest-ranking health care providers rely on an alternative reimbursement model called "capitation." From the Latin caput, meaning "head," capitation refers to a "per-head fee." In practical terms, it works like this: A payer (insurance company or self-funded business) gives a group of doctors and hospitals a fixed, annual, per-patient sum, paid upfront for all health care services rendered each year.
At Kaiser Permanente, a large health care system where I served as a CEO for 18 years, capitation helped our clinicians curb wasteful spending, lower medical costs and achieve the nation's No. 1 quality rating from both the National Committee for Quality Assurance and Medicare. When physicians have incentives to do better (rather than do more), that's what they do. They achieve higher rates of medical prevention, reduce complications from chronic disease and commit fewer medical errors.
As a result, patients who receive care through organizations like Kaiser Permanente are 30% to 50% less likely to die from heart attack, stroke and colon cancer than patients in the rest of the nation. If every health care provider in the U.S. matched even the low end of those results, we'd not only save billions of dollars annually, but we'd also save more than a quarter-million American lives each year.
The benefits of capitation don't end there. Prepaid health systems also have natural incentives to invest in "non-traditional" health care programs, aimed at addressing the social determinants of health, thus providing the kinds of public health benefits seen in nations like Norway and the Netherlands.
In Pennsylvania, Geisinger Health provides patients with free transportation to doctors' appointments to remove the barriers to obtaining medical care. Geisinger also runs a weekly food program for patients with diabetes, offering fresh fruits, vegetables, lean meats and whole grains to bolster healthy eating habits.
Mount Sinai's Urban Health Institute sends community health workers to the homes of asthma patients to help address environmental triggers of the disease, such as dust and secondhand smoke.
Finally, leaders at Kaiser Permanente recently partnered with leaders in the Oakland community to invest $25 million in housing for the homeless because they understand that reliable shelter is essential for better health.
Some views among capitalists focus on worker fungibility, experience, and cost with the ever present maximization of profit being the measure of "success." Davocrats, the Davos elite, mouth other platitudes, but capitalism has delivered two World Wars (Europeans doing their thing, the US of A gaining the profits), while the Manhattan Project was indicative of a wartime power of capital controlling a nation toward perfection of a weapon to make prior war look like mere debate. Not a good record for European capitalism, and possibly there is a better way; with "Replacement" Angst being attached to neo-capitalist experimentation, globally, called a New World Order with nothing new to it. Put a new dress on the whore, and still a whore, so what has capitalism to say for war being an arm of diplomatic contesting for market dominance - successful capitalism - as a sign of national well being? Perhaps the Davos thing about unification of populations worldwide, with mobility of persons aiding homogenization of labor pools hither and yon, may prove a success. Perhaps, however, it may be a Pandora's Box of bad policy; with a compelling entropy against undoing what currently is being engineered zealously.
Perhaps war is not the bastard child of capital against capital, between nations, and homogenization of populations will lessen nuclear war possibilities, but perhaps not, and nonetheless the homogenization effort seems prevalent, while being tested and being uncertain of whether the engineering's leading to good or bad. Other alternatives get left off the table, capital making and enforcing its rules. Meanwhile, we see "white nationalism" arising among many distanced from holding much capital, disgruntled over their lot, and blaming when channeled to do so, others who also lack capital and power and are non-white.
Divide and conquer is nothing new, and not unique to capital's preeminence today, but simply a tool used to effect. We live in interesting times. Since 1789.
________UPDATE_______
A word about the two parts of this post, where capitalism is in control either way, but government can make the game more sound, by policy. That is what the good doctor is saying. High cost pill-pushing will continue to be too much the norm so long as those entrusted with health of populations have the system rigged to reward high-cost pill pushing regardless of effectiveness or waste. Still, an alternative regulation of capital uses, the Doctor's "capitation" answer, remains hung high on capitalism being its own answer; with tinkering. That is a questionable premise. And why the one thought begat the other. Is capitation a policy bandaid? Or an insight that will better the lot of a nation spending foolishly high on low efficiency medicine. And if that, bettering the lot of currently abused patient populations, why would anyone think it is better in any sense than stronger regulation of those allowed to make well above average livings off the distress of the rest of us? Open up med school enrollments as a day-one step, and find out if de-bottlenecking the way the present restricted-access operation creates a false scarcity of healthcare, that step might change things for the better, be the parallel adaption be capitation, or remain fee for service. The notion there is one magic step is a path to ignoring other steps. Generating more healthcare providers for a population, percentage wise, seems to have worked in Cuba, and one should wonder who would not want it to work here.
Questioning motivations behind a status quo is inherently healthy, and too frequently ignored. Perhaps an insight is that capitation is better than decapitation, since the latter results in final solutions which come with problems attached. One may argue that decapitation, 1789 and onward, really fixed nothing. Yet it was done with the best of intentions. In some instances. A different elite replaced aristocracy, but it remained some few living well higher than the many, that being a key aspect of how healthcare is being delivered in the US today.