Doctors and Dollars

Atul Gawande asks how much doctors should be paid, in The New Yorker:

AtulFor those who have Medicare—its payments are near the middle of the range—an office visit for a new patient with a “low complexity” problem (service No. 99203) pays $77.29. A visit for a “high complexity” problem (service No. 99205) pays $151.92. Setting a dislocated shoulder (service No. 23650) pays $275.70. Removing a bunion: $492.35. Removing an appendix: $621.31. Removing a lung: $1,662.34. The best-paid service on the list? Surgical reconstruction for a baby born without a diaphragm: $5,366.98. The lowest-paying? Trimming a patient’s nails (“any number”): $10.15. The hospital collects separately for any costs it incurs.

The notion of a schedule like this, with services and fees laid out à la carte like a menu from Chili’s, may seem odd. In fact, it’s rooted in ancient history. Doctors have been paid on a piecework basis since at least the Code of Hammurabi; in Babylon during the eighteenth century B.C., a surgeon got ten shekels for any lifesaving operation he performed (only two shekels if the patient was a slave). The standardized fee schedule, though, is a thoroughly modern development.

More here.