Report Recommends Pay Scale Change

Congress May Alter Doctors' Medicare Fees Because of Harvard Report

BOSTON--The pay of some highly specialized surgeon will drop sharply while internists and others on the front lines of medicine will earn more under a proposed new physician fee structure drawn up for Congress, its author says.

The results of a two-and-a-half year project, called the resource-based relative value scale, are scheduled to be published this week in the New England Journal of Medicine and released by the federal Health Care Financing Administration.

Its chief architect, economist William C. Hsiao of the Harvard School of Public Health, said the plan is intended to correct "distorted and inequitable" fees that pay doctors too little for examining patients and too much for specific procedures and operations.

Hsiao's project attempts to determine the amount of work involved in everything doctors do--from checkups to brain surgery--so they can be paid what their services are worth.

If accepted by Congress, which requested it, the plan will be used to set the pay for doctors who treat elderly Medicare patients. It may also be adopted by state-run Medicaid programs and private insurance companies.

"In general, some of the primary care specialties will rise, and a few of the highly specialized surgical specialties may see a sharp drop in fees for their services," Hsiao said in an interview. "But the impact will not be uniform. Some specialties will not be affected very much."

Hsiao said that if adopted by government health agencies and insurance companies, his 2000-page plan could have a profound effect on the nation's health care system. Among other things, it could:

.improve care by encouraging doctors to spend more time with their patients.

.lower medical costs by discouraging expensive tests, procedures and operations.

.increase the number of doctors willing to specialize in family practice and other kinds of primary care.

.lower the income of some surgical specialists while raising the pay of physicians who provide general care to patients.

"This is going to be a very important piece of work that we hope will rationalize the manner in which physicians are paid," commented Dr. James Todd, senior deputy executive vice president of the American Medical Association.

Not all doctors would make the same pay under the system, because some have more demanding jobs than others.

"An orthopedic surgeon, under this fee system, will be justifiably making more than pediatricians," Hsiao said. "They will receive different levels of compensation according to their level of work."

Hsiao declined to reveal specifics of his report until it is formally published, but he outlined some of the major conclusions and described the effect he believes it could have on medicine.

Traditionally, doctors have been paid relatively little for seeing patients in their offices, monitoring them and writing prescriptions. However, they are often highly paid for diagnostic tests and such procedures as installing pacemakers.

Hsiao's plan would narrow this gap. He believes that without a strong financial incentive, doctors will do fewer questionable procedures.

"There could be a change in the quality of patient care," he said. "Physicians will be willing to spend more time with patients and treat them as a whole person."

The project attempts to set the relative value of different medical chores by taking into account the time involved, the practice costs, the specialized training needed and the stress of the work as well as the amount of thinking, judgment and technical skill required.