Friday, February 14, 2014

Rewarding Medicare Doctors for Quality

I read about the new bipartisan bill for the “doc-fix” with great anticipation. This bill is a solution to the sustainable growth rate (SGR) problem. The idea of the SGR was to put a limit on annual payment increases for physician services for Medicare patients. The SGR is generally acknowledged to be flawed, because it places arbitrary caps on spending without properly accounting for increases in the volume of services. Centers for Medicare and Medicaid Services (CMS) has experienced payment overruns in every year since it was enacted, and Congress, rather than enforcing the provisions of the bill, made a temporary adjustment, thereby worsening the overrun for the next year. By 2014, to maintain the SGR, CMS would need to decrease physician payments by 24 percent!

The new bill addresses this problem by replacing the SGR; instead, physicians will now see a 0.5 percent increase in payment annually for the next five years. It also incentivizes quality improvement in medical care by encouraging development of alternative payment models. Physicians may receive a 5% “bonus” payment, if at least 25% of their revenue is derived from a patient centered medical home arrangement by 2018. CMS is attempting to change from a fee-for-service payment model (the more services a physician provides, the higher the payment) to a model based on quality outcomes.

I applaud this effort, but there is significant work to be done in switching from a volume-based payment model to a quality-of-outcome model. The most basic (and difficult) challenge is defining which quality metrics to incentivize. The plan is to use the Physician Quality Reporting System or PQRS, (CMS loves acronyms!). As I reviewed the more than 300 quality metrics, it struck me that most measures were process measures, such as:
  • Testing appropriately or prescribing certain medications when treating diabetes patients
  • Giving aspirin to heart attack patients in a timely manner
  • Offering the right treatment advice for back pain
These are good metrics, but do they actually reflect the quality of care delivered? Physicians have long resisted being measured on quality, because they don’t trust the data. They generally feel the metrics represent just a small part of their practices and many of the metrics focus on primary care. There is less focus on specialty and surgical care metrics, and these areas comprise the bulk of the medical spend.  Metrics that look at the patient experience, such as how well the patient fared, are available, but minimally represented in the PQRS metrics. Important outcome measures need to be included, such as what percent of those with diabetes achieved all recommended  BP, LDL cholesterol, and A1c goals, not just what percent received recommended care.

Metrics are necessarily patient-based, but as new deliver models emerge, new metrics need to be utilized. The Affordable Care Act incentivizes health systems to focus on treating entire populations, not individuals, and helps pay for the IT infrastructure needed to manage and measure the health of a population. We need to use metrics focused on entire populations, not just on patients who happen to see their doctors.

Physicians will accept the metrics, if they have a role in determining, by specialty, which metrics best reflect high-quality care, and which metrics reflect appropriate care. This means measuring wasteful treatments and procedures.

I am a strong advocate of eliminating fee-for-service medicine. In my opinion, this payment model is a root cause for many of the problems in U.S. healthcare delivery. I applaud the effort to incentivize and measure value in health care, not volume. Developing and implementing a strong and accurate system of quality measures will be a giant step in the right direction.

Michael L. Taylor, MD, FACP
Chief Medical Officer


  1. He’s the best physician that knows the worthlessness of the most medicines. - Benjamin Franklin

    As I was sitting around the fireplace last night reading Poor Richard’s Almanac I began to wonder what Benjamin Franklin would think of our current healthcare system? If taken one step further what would our Founding Fathers think of it? Does a universal mandate for healthcare insurance fall under the pursuit of life, liberty and happiness? As a previous supporter of a single-payer system and someone who also supports the abolishment of the fee for service bureaucracy I will post a somewhat contrarian view of the ACO model.

    First of all, how does an ACO model actually make people healthier? If one is to do a literature search on this topic there will be a lot of discussion about how Doctors will be able to use the latest technology in order to screen patients better in order to get them the care that they need. There are also some articles on what a great opportunity this will be for mid-level providers such as nurse practitioners to provide treatment as well. After reading extensively on this topic I think that a good argument could be made that the only savings opportunity under this model will be in administration expenses and in the maintenance treatment of chronic illness.

    As usual, the nursing profession will take a back seat to the changes around us. A literature review on how the nursing profession will participate in the changes under an ACO model results in very little substance. This is an important consideration because it is the belief of this author that the only real opportunity for change will be at the community level with nurses leading the way. It is unfortunate that every year nurses are at the top of the Gallop poll in terms of professions that are the most ethical and trustworthy and yet this same organization shows poll results that indicate nurses have very little power when it comes to making any changes within the healthcare system.

    This author feels that for any real savings to take place under the ACO model nurses will need to play a significant role in the management and treatment of the patient population. Analytic screening technology will have to be designed with nurses in mind so that they can generate daily reports of patients that are likely to be admitted to the hospital and intervene with greater autonomy than what has been done in the past. If hospitals can predict within an 85% accuracy if someone admitted to the ER will die within 30 days an ACO should be able to predict what patients will be admitted to the hospital within the week.

    The last concept that I would like to bring up is that of Behavioral Economics. Nurses give and give and give without taking care of themselves. Another Gallop poll shows that nurses are no healthier than the general working population. The profession as a whole needs to be uplifted and I think that by giving them greater autonomy and having them rewarded financially in some small way would make sense. After all 98% of a $10,000,000 profit is better than 100% profit on $5,000,000. This argument could also be made for giving back a small percentage of the profits to the patient population as well. Isn’t it the taxpayer’s money anyway?

    As the current healthcare system around us is unfolding it will be interesting to see if ACO’s really are the answer and if the nursing profession will be able to break new ground and rise to the occasion. Thanks - Brian

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