Rita F. Redberg, a cardiologist, a professor of medicine at the University of California, San Francisco, and the editor of Archives of Internal Medicine wrote the article Squandering Medicare’s Money for The New York Times.

She describes procedures that Medicare pays for that have no benefit for the patient.  She said the following:

Changing the system would be relatively easy administratively, but would require a firm commitment to determining whether tests and procedures truly benefit patients before performing them. Unfortunately, in a political environment in which doctors providing end-of-life counseling are called death panels, and in which powerful constituencies seek to preserve an ever-increasing array of procedures and device sales, this solution remains hidden in plain view.

It is more than just the political climate that makes it difficult to solve this problem.  Culturally and economically there are forces that make this a natural outcome of health insurance.  The escalating cost of private health insurance demonstrates that it is not just a problem for Medicare. If it costs the individual patient nothing directly extra for his or her individual decision, then why wouldn’t the patient opt for any procedure that might have even the slightest possible benefit?  Efforts to make the patient pay something for making these kinds of decisions is fraught with its own set of problems.

It will take a very wise and creative person or group of people to figure a palatable way to solve this problem.  It is an easy problem to recognize, but a devilishly hard one to solve.  When the individual has no ability to change the costs and benefits by individual action,  but the group suffers the penalty for actions of the group,  this type of problem is classically a difficult one to solve.

It is easy to say that we ought to pay for outcomes rather than services performed.  In other words, a doctor or hospital gets paid in proportion to how much better the patient does than if the doctor or hospital had not intervened.   I suspect that this change to the system is much easier said than done.