Right Idea, Wrong Time

The Wall Street Journal report, “Doctors Oppose Giving Commission Power Over Medicare Payments” by Jacob Goldstein that featured President Obama’s Budget Director Orszag explaining the creation of a commission to determine fees for physicians continues to perpetuate the flawed path to health reform our president has begun to walk. Before paying for something, we usually ascertain what we are buying. In the instance of setting fees for medical care, most of us do not know what we are buying and then we constantly complain it costs too much.

It appears that shifting Medicare reimbursement out of the hands of Congress is a good thing to do because it removes one of many conflicts of interest that continue to drive up the cost of healthcare. Some highly paid medical specialists and the American Medical Association (AMA) are lobbying against this proposal because highly paid specialists are the ones who will be most financially affected by the proposed commission. Certain highly paid Specialists are the one group of physicians that can still afford to belong to the AMA. Insurers pay fees to the AMA for providing the nomenclature for the code books they use for claims administrative payments making insurers customers of the AMA.

Congressmen are reluctant to change the method of adjusted per capitation payment for medical services by region because they depend on political support especially from hospitals and doctors in regions that receive higher Medicare reimbursements.

The Dartmouth Atlas of Health Care http://www.dartmouthatlas.org/ has long confirmed variation of medical spending by regions in the United States is not due to medical care quality or to medical care need by region. Rather, this “small area variation” is due to differences in medical practice performance, i.e. the quality of care. These variations exist not only in widely disbursed geographic regions, but also among practicing physicians within the same hospital staff and by hospitals in the same community. Our current reimbursement system rewards each region based on medical spending, not on quality of care.

The idea of making all physician payments more equitable, based on performance and across specialties and populations is important. However, when the President highlights the importance of the discussion by proposing a new commission about payment mechanisms, we are distracted from the single most important focus for public discussion: What are we getting for what we are paying when it comes to health in America?

Preoccupation with reforming health through administrative change will not reform health care unless a new strategy is invoked that provides all of us regularly reported useful knowledge about what we are purchasing… before we pay for it.

The Health Gadfly