Incentives Work Against Proper Elder Care

The health care system encourages a reaction to episodes that is both costly and inefficient

The future will not be like today. The demographic changes that are so apparent to financial advisers concerned with retirement will have a striking effect on our health care system as well.

Chronic disease is replacing acute disease. Each of us reflects the changes in physiology that accompany the aging process superimposed on which are the decrements in function associated with multiple chronic conditions accumulated over a lifetime. When an acute illness strikes, it does so in a person with a unique physiologic and functional capability. Therefore medical care must be targeted to the special needs of each elder. Care packages require an extraordinary degree of individualization with respect to both the interventions and the site in which they are provided.”

Yet the American health care system has failed to recognize these changes, much less address them. Just over two hundred geriatricians receive board certification annually, and when the medical educational system mentions the older individual, usually it is with a focus on a targeted procedure rather than the total needs of the individual.

Acute hospital care is the focus of the educational system, with only the occasional student having an experience in home care or long-term care. Specialists are called on with increasing frequency, but only the rarest provider is able to appreciate the package of care needs of the individual seeking service and to coordinate the interventions to maximize that patient’s quality of life.

Medicare Advantage plans were designed with an eye toward providing a more organized approach to care at less cost to both the beneficiary and the system. Clearly the insurance industry can play a most critical role in designing and implementing some of the needed changes in the health care system, but it will not be able to do so alone.

The American health care system is replete with incentives and disincentives. Regrettably, most present-day incentives ensure that many patients will receive less than high quality care. We often pay 20 times as much (hourly rate) for procedures than we pay for coordination of care or for preventive care. People with even the most minor complaint often are transferred from nursing homes to emergency departments. This may be far easier for the staff at the long-term care facility than finding a physician to make a visit or paying for whatever tests and drugs that physician might order — even by phone.

The physician in the emergency department admits the patient to the acute care facility. Does that doctor have an incentive to do so? Might the risk of a malpractice suit if the patient is returned to the long-term care facility be in that doctor’s mind as well? Will the attending physician be happy that charges for acute care can be submitted to Medicare? Many of these patients are likely to have a poorer outcome at far higher costs than if they had been cared for in the chronic care facility.

Until the incentives and disincentives are recognized, they cannot be altered with an eye toward improving outcomes while controlling costs. Medicare, designed in the 1960s to pay for acute level care, must rethink its mission.

For example, Leff et al showed that certain types of acute-level care may be delivered outside an acute-care facility at far less expense with equal or better outcomes (Ann Intern Med 2005; 143:798-808). But until the huge incentives to admit an elder to a hospital are appreciated, change will not be forthcoming.

This effort to address the incentives in the system must enlist not only economists but health care administrators, health care researchers, insurance providers, physicians, and other health care providers. Only such a team can assure each of us the highest quality of care at the most reasonable cost.

R. Knight Steel, MD is Chief, Geriatric Medicine, Hackensack University Medical Center and President, Institute for Incentives in Health Care

Among his many accomplishments, R. Knight Steel, MD, has been associate medical director at Monroe Community Hospital (affiliated with the University of Rochester School of Medicine); chief, geriatrics section, Evans Memorial Department of Medicine at Boston University; director of BU’s gerontology center; and president of the American Geriatrics Society. He chaired the first Certifying Examination Committee in Geriatric Medicine for both the American Board of Internal Medicine and the American Board of Family Practice. He also served on the Residency Review Committee for Internal Medicine and chaired the group that wrote the first criteria for the training of fellows in geriatric medicine while he worked to revise the general guidelines for internal medicine to include more content in geriatric medicine.

He was the first chair of the Council of Medical Societies of the American College of Physicians, and was chief, Health of the Elderly Programme, for the World Health Organization. He is a founding member of InterRAI («»), a not-for-profit organization comprising an international group of researchers and clinicians dedicated to assuring the best function and highest quality of life to all persons as they age by designing and implementing the most useful scientifically sound assessment tools for the care of older individuals.

The author has been a visiting professor at the Yale University School of Medicine, Harvard University Medical School, Brown University School of Medicine, Johns Hopkins University School of Medicine, University of California – San Francisco School of Medicine, and numerous other schools. He has published over 100 articles, including one, in the New England Journal of Medicine, reporting the results of one of the first studies on iatrogenic disease. That paper was recently deemed a “classic paper” and republished in the British Medical Journal’s Quality and Safety in Healthcare issue in 2004.

He has been the recipient of numerous awards, including the Distinguished Service Award from the University of North Carolina School of Medicine, the Geriatric Medicine Academic Award from the NIH (in the first year it was available), the Milo D. Leavitt Award from the American Geriatrics Society, the Joseph T. Freeman Award from the Gerontological Society of America, and Hackensack University Medical Center’s Physician of the Year Award.

Our most popular topics on