ADVERTISEMENT
Report of the National Commission on Physician Payment Reform
In March 2012, the Society of General Internal Medicine convened the National Commission on Physician Payment Reform to recommend forms of payment that would maximize good clinical outcomes, enhance patient and physician satisfaction and autonomy, and provide cost-effective care. The commission was formed to address the growing awareness that the current level of healthcare spending in this country is unsustainable in the long term.
On March 4, 2013, the commission issued a report detailing a series of recommendations aimed at reining in health spending and improving quality of care by fundamentally changing the way doctors are paid.
Former Senator William H. Frist, MD, served as the commission’s honorary chair. Steven A. Schroeder, MD, chaired the 14-member panel that comprised physicians from various specialties in addition to experts in healthcare policy, delivery, and payment.
High cost and uneven quality of care are the 2 primary concerns facing the healthcare industry. Spending related to healthcare represents 18% of the gross domestic product in the United States, a figure that translates to $8000 per person per year. In 1975, Medicare represented 3.5% of the federal budget; in 2010, the percentage had risen to 15.1. Projections for 2020 put the percentage at 17.
All of this spending, however, has not resulted in dramatic improvement in the health of Americans, according to the report’s authors; in fact, Americans rank 37th in health status in comparison with citizens of other nations.
The report goes on to identify the factors that are currently driving the high level of costs. The authors note that the fee-for-service model currently used to reimburse physicians for patient services does not necessarily link payment to patient outcomes. Also, clinicians in the United States are reimbursed for their reliance on technology and expensive care; procedures utilizing high-cost technology are reimbursed at higher rates that services aimed at evaluating patients or managing care for patients with chronic conditions over time. Finally, the ratio of specialists to primary care physicians in the United States is high, the authors comment, adding that the “current payment system favors high-cost procedures over time spent on evaluation or management of care.”
In addition to those factors, the report notes that payments for the same service or procedure are higher when performed in a hospital setting compared with an outpatient facility. Medicare pays $450 for an echocardiogram done in a hospital and $180 for the same procedure performed in a physician’s office, for example.
In examining the factors contributing to the high cost and uneven quality of healthcare in the United States, the commission assessed the role of physician payment, and concluded that “our nation cannot control runaway medical spending without fundamentally changing how physicians are paid, including the inherent incentives built into the current fee-for-service pay system.” They place the issues surrounding physician payment into 2 general categories: (1) systemic issues, specifically the skewed incentives of fee-for-service payment; and (2) Medicare issues, specifically the sustainable growth rate (SGR) and the operation of the Relative Value Scale Update Committee.
The commission has made 12 recommendations (see page 9) that concentrate on the near future, calling for changes to the current system and offering a 5-year plan for transitioning to a blended payment system that will yield better results for both public and private payers, as well as patients. The recommendations are aimed at eliminating the fee-for-service payment model and call for transparency in the way physicians are reimbursed. They also include suggestions for how to eliminate the SGR and its associated “doc fix.”
The full report is available at: https://physicianpaymentcommission.org/report/
