Perverse Incentives: Why "Pay for Performance" Could Lead Doctors to Discriminate Against the Obese

The Affordable Care Act places a high premium on "pay for performance" systems, which reward hospitals and doctors financially based on the quality of care they provide -- not the quantity, as in our current system. Medicare and Medicaid have already been implementing so-called P4P initiatives. But new research out of Johns Hopkins suggests this focus on quality could inadvertently backfire on one of the patient groups that President Obama most wants to help: Obese people.

According to the Hopkins study, Medicare and Medicaid are using P4P formulas to slash physicians' pay when their patients come down with complications, such as infections, after surgery. That could prompt surgeons to delay or even deny surgery on obese patients. Why? Because being overweight significantly increases a patient's risk of developing complications.

And complications, of course, cost the health care system money. Total inpatient costs for the typical gallbladder removal, for example, are $2,978 higher for obese patients, say the Hopkins researchers, who studied claims data from 36,483 Blue Cross/Blue Shield patients. Appendectomies cost an extra $1,161.

No doubt P4P will only grow in popularity. The healthcare reform bill establishes a "national quality improvement strategy," which includes developing quality-based payment methods.

The notion that surgeons would deny care to overweight people might seem outlandish, but to doctors, it's a very real risk. "I have not seen discrimination, but it's well known that financial incentives impede the behavior of some physicians," says Martin A. Makary, associate professor of surgery and health policy at Hopkins's School of Medicine and the lead researcher on the study. "I can tell you, we routinely meet patients who report they've had a tough time getting care."

Denying care to obese people only increases the pressure on a population that's already a huge target of health reform. The healthcare-reform law includes provisions that will reward Medicare and Medicaid patients who participate in behavior-modification programs, require chain restaurants to disclose the nutritional content of their food, and permit employers to offer significant financial rewards to patients who participate in wellness programs.

What's more, the Obama Administration's 2011 budget includes $10 million in funding for workplace wellness programs and a whopping $1 billion to improve children's access to healthy foods at school. And a growing number of states are considering raising money for new health programs by taxing soda and other junk foods -- essentially penalizing people for their bad dietary habits.

Encouraging obese people to lose weight is one thing -- denying them care when they're seriously ill is quite another. So how can legislators design P4P programs that don't discriminate against obese people, or any other patient group? They should build in metrics that automatically adjust the payments for patients who are at higher risk for complications. It's the only way they can ensure that everyone facing surgery or any other life-saving procedure ends up on a level playing field.