Rosemarie Sweeney, AAFP's vice president for socioeconomic affairs and policy analysis, recently told an Institute of Medicine subcommittee on pay-for-performance that overlaying pay-for-performance -- also known as value-based purchasing -- onto the Medicare program must be done "thoughtfully and carefully."
In her July 25 testimony in Washington, Sweeney affirmed the AAFP supports moving to pay-for-performance in the Medicare program with the goal of continuously improving care of patients. However, she said: "Our consistent message to Congress is that if is not done well, a value-based purchasing program will not only fail to improve health care quality but could unravel the preparation and progress that medical societies have carefully fostered."
Sweeney said the environment in which physicians now practice "is challenging at best and, at its worst, is intolerable for some." She said FPs love caring for their patients but have little enthusiasm for Medicare "because the program has a history of disproportionately low payments to family physicians, largely because it is based on a reimbursement scheme designed to reward volume and to discourage innovations in the provision of care."
The Academy would like to see a value-based purchasing program that is incrementally phased in and that provides incentives for structural and systems changes, encourages reporting of data on performance measures, and rewards continual improvements in clinical performance, Sweeney told the committee.
She shared with committee members a framework for phasing in -- in four stages -- a Medicare pay-for-performance program "that is designed to improve the quality and safety of medical care for patients and to increase the efficiency of medical practice."
- Phase one: All physicians would receive a positive update in 2006, as recommended by the Medicare Payment Advisory Commission, thus reversing the 4.3 percent reduction now projected. Congress should establish a floor for such updates in subsequent years, which would consistently apply to all physicians.
- Phase two: After development of reporting mechanisms and specifications is completed, Medicare would begin encouraging structural and systems changes in practice -- such as electronic health records and registries -- through a "pay-for-reporting" incentive system so that physicians could improve their capacity to deliver quality care.
- Phase three: Assuming that physicians are able to do so, Medicare would encourage reporting of data on evidence-based performance measures that have been appropriately vetted, and physicians would receive pay-for-reporting incentives based on the reporting of data -- not on the outcomes achieved.
- Phase four: Contingent on development of a long-term solution allowing for annual payment updates linked to inflation plus funds for incentives, Medicare would encourage continual enhancement of care quality through incentive payments to physicians for demonstrated improvements in outcomes and processes, using evidence-based performance measures.
"The program must provide incentives — not punishment — to encourage continuous quality improvement," Sweeney said in her testimony. She said it was unfair to ask physicians to bear the cost of implementing health information technology in their offices when so many others -- patients, third-party payers and insurers, to name a few -- also reap the benefits.
Other speakers testifying included John Tooker, M.D., executive vice president and CEO of the American College of Physicians, and Nancy Nielsen, M.D., speaker of the AMA House of Delegates.
Information gathered by the IOM subcommittee on pay-for-performance will be compiled into a report scheduled for release in mid-2006.
