It looks like averting a Medicare physician payment cut isn’t going to be the slam dunk it has been the past four years. This year’s reprieve is entangled in a web of congressional tactics, deficit politics and growing concerns that patients aren’t getting their money’s worth from doctors.
The hope is that everyone will come to their senses by averting the payment cut for 2007, but only in exchange for public reporting of quality data. Meanwhile, serious work should commence on refining pay-for-performance programs so they achieve the goal of cost-efficient care, as theInstitute of Medicine recently recommended.
Current P4P projects focus on rewarding providers who already are high achievers. That needs to shift toward finding ways to reward across-the-board improvement in adhering to quality indicators and/or achieving better outcomes.
Furthermore, we need a system that pays primary-care physicians to spend more time with patients. Primary-care physicians need to be encouraged to prevent illnesses, find them earlier and manage them better when they do occur.
What is clear from the current CMS data on utilization is that the current physician payment formula is fatally flawed. Doctors frustrated with lagging payment updates have been treating Medicare patients like they are ATMs. Medicare expenditures for physicians’ services grew by 10% in 2005, but a study by the Center for Studying Health System Change found that private health insurance spending on physician services rose at a slower pace of 7% the same year. As work by the Dartmouth Atlas team and the RAND Corp. has found, all this greater spending actually leads to worse outcomes.
Based on the current formulas, replacing planned Medicare payment cuts of 5.1% in 2007 and a total of 37% through 2015 would cost tens of billions of dollars that we don’t have. Projected Part B spending is already outrunning targeted spending by $30 billion just over the next five years, the CMS says.
This seems like a critical juncture. Simply plowing ahead with a payment increase without a major restructuring of the way we pay for and provide care is lunacy at a time when deficits are set to explode again and the pressure on access to care couldn’t be greater.
Todd Sloane is assistant managing editor Op-Ed.