How We Pay for Medical Care

By James K. Rotchford, MD

In the May/June 2025 issue of WSMA Reports, Amarita Stark, MD, discusses the threats to children’s access to medical care due to potential Medicaid cuts. I heartily concur with her concerns and have concerns about access barriers for the vast majority of Americans.

Social determinants account for approximately 80% of health outcomes. Hence, significant societal changes are necessary to achieve substantial progress in American health outcomes. Meanwhile, what are the policies that hinder the provision of cost-effective medical care and, consequently, limit access to it?

Let’s start with changing how we pay for medical care. Practitioner time and expertise would be the primary determinant for reimbursements, as they generally are for non-medical professional services. Coverage eligibility can determine the amount of health care coupons one receives, similar to food stamps. Let patients play a larger role in deciding what is most valuable and most helpful. Licensed professionals would remain accountable for ensuring that medical care options are reviewed and offered in accordance with established standards of care. Patient outcomes and satisfaction would become the driving forces for medical care. This contrasts with our current policies, in which CPT codes and their documentation commonly determine care.

Serious illnesses requiring hospitalization or significant procedural interventions could be covered by “large deductibles” as seen in the private sector. Prevention and early care could be incentivized by providing coupons for specified services, such as annual exams, breast exams, and others. Some contexts would have reimbursements based similarly to what is now done with CPT codes and their documentation. Professional time and expertise could still, however, be the primary determinants for most payments.

Costs would be reduced by excluding third parties in decision processes. Third parties currently define available care and have limited accountability, especially regarding individual outcomes. As an example, Medicaid providers incur inordinate expenses that impact cost-effective outcomes. Administrative costs disproportionately drive expenses, along with documentation liabilities, disputes over necessity, and costs associated with managing legal and regulatory liabilities.

In summary, cost-effective outcomes are compromised in large part by how we pay for medical care. If we do not address how we pay for medical care, our ability to ensure adequate and universal medical care remains compromised.

James K. Rotchford, MD, MPH, is an addiction medicine physician with Olympas Medical Services in Port Townsend.

This article was featured in the September/October 2025 issue of WSMA Reports, WSMA’s print magazine.