Healthcare Economist Critiques My P4P Article

Thanks to Jason Shafrin for sharing his thoughts on my article, “Pay-for-Performance: Is Medicare a Good Candidate?

Shafrin points to a problem with my preference for (I must apologize in advance for all these modifiers and hyphens) privately administered third-party pay-for-performance financial incentives:

Cannon’s point of using competition between insurers to allow each to experiment is wise assuming that insurers want the best care for their patients. As Dr. Fogoros notes in his GUTHealtcare website, patients generally do not pay for their health insurance, employers do. And for employers “As long as we don’t hear more than the average number of complaints from our employees, the health coverage we provide is, by definition, good enough.”

True enough: insurers and employers are not always good agents for employee-patients. In the Medicare setting, however, seniors can choose a private “Medicare Advantage” plan themselves – that is, they are not assigned to a plan by an employer. So in Medicare Advantage, there may be more competitive pressure for private insurers to get P4P right.