Doctors should be paid flat salaries to eliminate financial conflicts of interest, argue medical ethicists
05/21/2017 // Tracey Watson // Views

How many of you, like me, have gone to the doctor feeling really lousy, expecting them to prescribe bed-rest and some medication, only to find yourself going from one place to another for a million blood tests and multiple types of scans – all while you feel like death? And then, you anxiously wait to hear what terrible disease you have, only to never even hear back from the doctor. While this is both annoying and stressful, it’s actually common practice for doctors because they don’t get paid flat salaries, but earn money from all those different services they send you for. This serious conflict of interest was recently addressed by behavioral economists George Loewenstein of Carnegie Mellon University, and Ian Larkin of the University of California, Los Angeles, in an article published by Science Daily.

While the glaring conflict of interest associated with the payments doctors receive from pharmaceutical companies has received widespread attention – like in a reccnt Drug Watch article, which highlighted the fact that doctors and hospitals received $3.5 billion from Big Pharma in 2013 – very little attention is paid to the problem of doctors receiving money for sending their patients for additional services.

Professor Loewenstein, a leading expert on conflicts of interest and professor of economics and psychology at CMU, notes that sending patients for multiple additional procedures causes more harm than just wasting patients’ time and money. He points out that most of these tests and procedures also cause unnecessary pain and discomfort, and that sometimes they can go horribly wrong.


My mother-in-law is an excellent example that proves his point. Having had severe diarrhea for over two weeks recently, she was admitted to the hospital severely dehydrated, with low blood pressure and an erratic heart rhythm. We were all understandably stressed, but the doctor assured her he would find out what was wrong. She ended up spending a week in hospital, during which time the doctor administered multiple courses of antibiotics – in spite of stool tests which confirmed she did not have a bacterial infection – visited her up to three times a day so he could bill her as often as possible; gave her multiple other intravenous medications, in spite of admitting he had no idea what was wrong; sent her for a CT scan; and then sent her for a colonoscopy and gastroscopy. She was understandably stressed by all these invasive, sometimes painful treatments and tests, and with the doctor calling for a colonoscopy, became convinced she had cancer. Then, on the 8th day in hospital, he told her he still had no idea what was wrong with her, but that they had found ulcers in her stomach and that he would send her home with … wait for it … more antibiotics. She went home, having been poked, prodded and stressed, still experiencing diarrhea and basically no clearer about what was wrong with her. Of course, her doctor was smiling all the way to the bank.

Loewenstein and Larkin insist that the only way to prevent these types of distressing, financially draining experiences is to change the way doctors are paid. If they received flat-rate salaries, instead of being incentivized for prescribing these extra services, they argue, costs would come down and patients would only be subjected to truly necessary procedures. They cite the Mayo Clinic, Cleveland Clinic and California’s Kaiser Group as successful examples of institutions where physicians are paid set salaries, without incentives for additional services ordered.

Interestingly, they also note that many doctors would be happier if the system were changed.

“The high levels of job dissatisfaction reported by many physicians may result, in part, from the need to navigate the complexities of the fee-for-service arrangements," said Professor Larkin. “Instead of focusing on providing patients with the best possible medical care, physicians are forced to consider the ramifications of their decisions for their own paychecks.”

It looks like it would be a better system all round, then. Sadly, it’s unlikely to change anytime soon. In the meantime, it's probably best to avoid going to the doctor as much as possible by preventing disease in the first place.

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