Will higher physician payments and bonuses lead to lower costs?

As reported by the Washington Post, CMS is attempting to jump-start the adoption of electronic health records/electronic medical records (EHR/EMR) and e-prescribing with a new program that will pay physicians and practices a bonus for using electronic prescribing tools. Practices that move to electronic prescribing methods will receive bonuses of 2% in 2009 and 2010, bonuses of 1% in 2011 and 2012, and bonuses of 1/2 % in 2013.

At the same time, the New York Times is reporting on Philadelphia area insurers that are offering bonus payments or increased payments to physicians for using tools such as telephone visits, e-mail “visits,” and electronic monitoring of patients’ conditions to improve continuity of care and chronic disease care.

Can we save money by spending more? The statement seems counterintuitive, but paying more for the rightkinds of care and treatment can save money in the long run. For example, e-prescribing is often safer (no messy handwriting, less potential for drug interactions) and less of an administrative burden (less paperwork, faster transmission of information) than prescribing on paper. Checking in on patients daily or weekly and tracking blood sugar or blood pressure over time rather than waiting for the patient’s condition to become a crisis leads to lower spending, just as prevention is cheaper than a cure. With that in mind, both of these programs should be on the right track.