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Up Front

How the Real World Can Influence Medicare Payment Reform

Kavita Patel and Jeffrey Nadel

Recent developments in Congress around reform of the Medicare Sustainable Growth Rate (SGR) have allowed for a broader dialogue on changes to physician payment. This year’s looming physician payment cuts, approximately 24% and triggered by the dysfunctional SGR caps to Medicare spending, again threaten access to care for millions of patients across the country. Bipartisan and bicameral legislation has now emerged to repeal the SGR, replace it with stable updates, and provides incentives to move physicians away from fee-for-service payment into alternative payment models such as Accountable Care Organizations. On Tuesday, November 19, 2013, the Engelberg Center for Health Care Reform and the Richard Merkin Initiative on Payment Reform and Clinical Leadership at Brookings hosted a timely event on the next steps for Medicare Physician Payment Reform.

The day included an esteemed panel of guests that covered a range of topics from physician payment reform in Congress to opportunities and challenges for independent physician practices. The event’s final panel, with members representing clinical oncology, cardiology, private payers, and regional health initiatives, provided the much-needed private sector perspective that Medicare should draw upon to achieve success in their delivery and payment reform efforts.

Interestingly enough, the often elusive goals of payment reform in Medicare physician payments is not holding physicians and payers around the country from reforming the system in different ways:

  • In clinical cardiology, the use of clinical registries as well as point of service decision supports (known as SmartCare) has helped to reduce unnecessary variation in care and encourage increased uptake of evidence-based medicine.
  • Oncologists in small practices around the country are changing their day to day practices to make sure that patients have better care coordination and ultimately, a better experience while dealing with the most stressful clinical situations. They are doing this through a novel delivery system reform called the “Oncology Patient Centered Medical Home.” In the medical home in oncology, offices are staying open on weekends and weeknights and hiring nurses to spend their time coordinating the various specialty and primary care visits for patients and therefore, reducing duplicate tests, unnecessary emergency room visits and hospitalizations.
  • Payers such as Blue Cross Blue Shield are changing the contracts they have with physicians to include payments for care that is value- oriented and not simply dependent on volume. Results from these types of contracts have been promising, which has encouraged others including Medicaid and Medicare to explore similar arrangements.

To arrive at the value-based health care system we need—one that empowers patients to take responsibility for their healthcare, rewards providers for delivering high quality and efficient care, and achieves cost savings for payers and the system at large—we must make cross-sector examination and learning more systematic and widespread. There are too many opportunities for success and informed learning not to engage and learn from all sides of the health care system.

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