While Congress mucks about with procedural shenanigans aimed at embarrassing the other side of the aisle and fruitlessly debates plans to expand or rip apart popular programs, the goal of fixing our ludicrously muddled healthcare payment system remains an afterthought. The end result of all the maneuvering will be, as always, stasis. Meanwhile, the long-term future of government health programs looks gloomier by the day, and efforts to improve quality of care are stymied by a lack of incentives.
The issue has particular relevance in physician payments. The ritual dance occasioned each year since 2003 by the sustainable growth rate formula is under way again, only now it seems it is a biannual show. No one doubts money will be found to prevent a 10% cut in Part B payments in the second half of this year. The question is why the dance is still necessary.
Given the cost of fee-for-service care, nearly half of which may involve substandard medical practice, you would think so-called budget-conscious lawmakers would be eagerly joining the movement toward a new way to pay for and organize care. A number of public and private payers, foundations and health policy experts are coalescing around ideas of bundled payments for each episode of care, using carrots and some sticks to organize care around so-called medical homes, with primary-care doctors at the hub.
One analysis by the Commonwealth Funds Commission on a High Performance Health System estimates that the combined savings from just those two changes could reach $420 billion over 10 yearswith several big caveats.
The Medicare Payment Advisory Commission this month backed additional funding for primary care, but true to its nature, made it a budget-neutral proposal, meaning added pay would come off the backs of specialists, a sure-fire nonstarter on Capitol Hill. Still, the thought was nice; primary care is experiencing a growing shortage of good doctors because of lower pay and the attractiveness of less-stressful specialties.
The medical home concept entails basing payments to primary-care physician practices on their level of care coordination with other providers and their management of care, including educating patients on taking care of themselves and providing 24-hour primary-care coverage. Every Medicare fee-for-service beneficiary would be enrolled in a medical home that has this enhanced capacity. The ideaand its still just a theoryis that it would force an overhaul of medicine, pushing all physicians into more integrated systems of care.
The bundled payments would also link physicians and hospitals around acute-care episodes. Medicare would prospectively pay a comprehensive bundled episode case rate by DRG from hospital admission through post-acute care, which means that hospitals, medical groups and post-acute providers that now get paid under various parts of Medicare would have to work together and share the fees. The big stumbling block would of course be identifying the organization to which the episodic case rates would be paid.
Despite its revolutionary nature, the medical home concept is getting some toe-in-the-water treatment in pilot projects run by Medicare (starting in 2009 in eight states), the American Academy of Family Physicians and UnitedHealthcare (this year in Florida). The AAFPs project, under way since 2006, involves 36 primary-care practices across the U.S. It has found that medical homes use higher levels of information technology, manage access to care, access evidence-based reminders at the point of care and ensure that the right practitioners are doing each task.
This is a nice start, but we need to pick up the pace. This should be a national challengefinding a way out of a payment muddle that only encourages the kind of political chicanery we find rampant in Washington today, while solving the riddles of a system of care that mainly delivers high costs and substandard outcomes.