The Wonk Room

Baucus And Grassley Preview What Bipartisan Health Reform Will Look Like

The Senate Finance Committee is meeting behind closed doors today to consider a series of health care delivery reforms that could potentially improve health care quality and lower costs. Yesterday, Sens. Max Baucus (D-MT) and Chuck Grassley (R-IA) released ‘Description of Policy Options: Transforming the Health Care Delivery System – Proposals to Improve Patient Care and Reduce Health Care Costs,’ a compilation of recommendations for how to reform the way Medicare and Medicaid reimburse providers:

– Paying for health outcomes: Currently, the system pays hospitals and providers for reporting data on quality, the Senate Finance Committee (SFC) is proposing to pay for actual improved outcomes. That means paying hospitals that meet certain quality performance standards and lowering preventable hospital readmission by reducing payments to hospitals with high preventable readmission rations.

– Encouraging care coordination through payment reform: SFC is proposing developing payment innovations that encourage independent health care providers to work cooperatively for the benefit of the patient. They would bundle hospital stays with post-acute care services, allow groups of providers who voluntarily meet quality thresholds to share in the cost-savings they achieve for the Medicare program, and pay for a health care professional to help patients transition out of the hospital.

– Expanding electronic health records: Electronic health records lower medical errors, improve care quality and reduce health care spending, but many providers are reluctant to invest in a system with limited national standardization and slow financial return. Nationally, less than 25 percent of hospitals, and less than 20 percent of doctor’s offices, employ health information technology systems (HIT). The stimulus provided $19 billion to encourage providers to implement electronic health records and SFC is looking to expedite health care’s push into the 21st century by “exploring the possibility of expanding eligibility” for electronic health records by offering incentive payments not just to doctors but also to nurse practitioners, physician assistants and other providers.

– Improving comparative effectiveness research: The stimulus bill already includes $1.1 billion for research that compares the effectiveness of different treatments and procedures. SFC would establish “a private, non-profit corporation that would generate and synthesize evidence on what works in health care.” The institute would remain independent and diverse “so that no stakeholder interest dominates” and would “establish a national agenda for research priorities.” To ensure patient safety, Medicare “could be allowed to use the findings only in circumstances where the process by which it uses the information is transparent, relies on all available evidence, considers the potential effects on subpopulations of beneficiaries, and allows for public comment on any draft proposals that use the information.”

– Dealing with the shortage of primary care providers: Some studies have shown that “the trajectory of the supply of primary care physicians for adult patients is now falling behind the growth of the adult population” and HHS estimates that “by 2020 there will be a shortage of 66,000 primary care doctors nationwide.” Lower primary care salaries discourage medical students from practicing primary care and residency slots for primacy are physicians have decreased in recent years. SFC is proposing redistributing unused residency slots to encourage training in primary care and general surgery and establishing bonuses payments “for general surgeons practicing in newly defined rural general surgeon scarcity areas.” Primary care providers could also receive 10 percent bonus payments.

– Linking Medicare Advantage payments to quality: Currently, the federal government subsidizes private insurers to provide Medicare beneficiaries with some extra benefits and care in rural areas. But numerous studies have demonstrated that rather than using the extra federal dollars to provide better quality care (and coordinated care), insurers are pocketing the extra dough. SFC is promising to tie “some portion of payment” “to performance and quality measures,” modify payment to encourage plans to provide care more efficiently and play plans a bonus for chronic care management.

Individually these reforms seem small. For instance, the document places some restraints on the use of data obtains from comparative effectiveness research (for instance, considering effects on ’subpopulations’ may very well prevent CMS from making serious reimbursement decisions) and does not call for the elimination of Medicare Advantage overpayments. But collectively, these reforms start the slow process of re-orienting the system from one that encourages providers to over-prescribe treatments, to one that rewards quality care and outcomes.