Currently, physicians have an incentive to use the most expensive drugs possible, as they are reimbursed by Medicare in proportion to the price of the drug. However, this may not be the best for patients' health, as less expensive drugs might work better. A new experimental program will reimburse physicians at a flat rate. Therefore, under this philosophy, physicians would no longer have an interest in prescribing more expensive drugs unless they believe that the patient would benefit more. Some groups oppose this, saying that health outcomes in cancer patients improved while spending rose, and that Medicare reimbursement is already low, making certain treatments more difficult to perform.
I agree that such critics have a point. Many physicians probably prescribe expensive drugs based on their physiological results, but there could be others who prescribe them for more financially related reasons. I think a potential solution to this is to keep the current reimbursement system and not prescribe expensive medications unless the patient meets certain qualifications. Therefore, only the sickest patients receive more potent drugs. This does not necessarily mean, though, that the most expensive drugs are more potent. Are there any other ways to solve this problem? Feel free to comment.