Why doctors can’t be compensated via patient outcomes

young-doctor-consultingPOST SUMMARY: As long as the majority of patients choose not to be compliant and don’t follow doctor’s orders insurers should not compensate physicians on patient outcomes.

According to Capgemini Consulting medication non-adherence is one of the most serious problems in health care, posing a heavy financial impact on all constituencies. On the cost side, the New England Healthcare Institute estimated that medication non-adherence is responsible for $290 billion in “otherwise avoidable medical spending” in the US alone each year.   The US pharmaceutical industry alone loses an estimated $188 billion annually due to medication non-adherence. This represents 59% of the $320 billion in total US pharmaceutical revenue in 2011 and 37% of the $508 billion annual potential total revenue.

Some adults reduce prescription drug costs by skipping doses and delaying filling prescriptions. Some cost-reduction strategies used by adults have been associated with negative health outcomes.  The other reason why patients stop taking their drugs are the side effects that interfere with the quality of life.  Some antibiotics, for example, have to be taken until the Rx runs out, but most patients stop taking them as soon as they feel better.

Then there are patients who don’t follow doctor’s orders to eat right and get more exercise.  It’s estimated 63% of people on prescription drugs strayed from their doctor’s orders.  Cost, discomfort, inconvenience, fear, embarrassment, misinformation, and the difficulty of changing behaviors (especially regarding smoking, diet, and exercise) all contribute to what’s called “medical noncompliance.


Insurers need to follow-up with patients to ensure they are both compliant and following their doctor’s orders.  If not, patients should pay the price in increased premiums since this affects every one of us via higher health care costs.