Liberals’ solution to rising health care costs has consistently been to take control of health care decisions away from patients and their doctors and to place it in the hands of government. Obamacare does this by allowing unelected bureaucrats to define and reward value in the Medicare program, and the President’s proposal for deficit reduction would further empower government to interfere in the practice of medicine. This is the wrong way to reduce costs, and will have severe consequences for patients, physicians, and the quality of health care in the United States.

In 2012, Obamacare will create the “Value-Based Purchasing Program” in Medicare. Using a pay-for-performance scheme, the program will reimburse hospitals and other health care providers at different rates based on how they score on performance measures chosen by the Secretary of Health and Human Services. Proponents of pay-for-performance see it as a way to use financial incentives to streamline and improve the quality of health care while attempting to reduce costs. But the fact is that standardization of the practice of medicine costs patients and physicians tremendously, and evidence shows it does very little to improve health outcomes.

Years of research, including early warnings from The Heritage Foundation, indicate that Obamacare’s Value-Based Purchasing Program and schemes like it will be unsuccessful and result in more harm than good. Studies have since provided evidence to support expectations that pay-for-performance would hurt the doctor-patient relationship, threaten physician autonomy, and deteriorate the quality of patient care in several other ways.

In 2005, Richard Dolinar, M.D., and S. Luke Leininger wrote for Heritage that pay-for-performance would:

  • Dump patients into a system of top-down, “cookbook” medicine that is incompatible with high professional standards of patient care;
  • Spawn an increasing number of Medicare rules, regulations, and guidelines, further undercut­ting the physician’s professional autonomy and integrity, as well as patient choice and access to care;
  • Undermine the more desirable goal of high quality, which requires personalized care;
  • Retard medical innovation and introduce unproductive gaming by doctors to secure higher Medicare reimbursement; and
  • Further weaken the traditional doctor-patient relationship.

Researchers for the University of Manchester’s National Primary Care Research and Development Centre in the United Kingdom examined the effects of pay-for-performance programs in the United Kingdom and California for primary care physicians. They concluded that the programs had unintended effects on care and physician motivation, including “encouraging physicians to avoid sicker patients, exacerbating disparities, and neglecting types of care for which quality is not measured.”

Financial incentives to meet certain performance targets led to the deterioration of the doctor-patient relationship, as physicians “expressed resentment about patients who refused to comply with their advice.” According to the authors, “interviews contained reports of seriously dysfunctional or coercive behavior” by doctors in cases where patients were noncompliant. In extreme cases, doctors threatened to disenroll their patients, accused patients of hurting their rating, or lied about the consequences for failure to comply. Physicians even reported disregarding informed consent procedures to meet screening targets for certain diseases.

Finally, the study found that pay-for-performance was perceived by physicians as a challenge to their professional autonomy, and that the care they provided was imposed upon and managed externally. The authors write, “The system was viewed by many as unfair and opaque because it failed to take account of variations in practice populations, comprised indicators that were not amenable to control by physicians, withheld money that was due to physicians, and added to workload.”

Rising health care costs are a serious concern that must be addressed, and lawmakers are correct to look for solutions that solve the problem without damaging the quality of health care in the United States. However, creating a pay-for-performance program within Medicare will do the opposite, as will any other changes to the program that give bureaucrats—not patients and doctors—more control.