Expert Panel Calls for Medicare Payment Reform

Medicare's fee-for-service payment structure has created a disjointed and fragmented payment system that discourages care coordination and the provision of primary care services. That was one of the main messages delivered by an expert panel during a forum on health care quality and the health delivery system held here on Oct. 31.

Paul Ginsburg, M.D., president of the Center for Studying Health System Change, decried the "toxic effects" of the current payment system, saying it is dramatically undermining primary care.

"I just got back from doing site visits in California, and I was really struck by the shortages of community-based primary care physicians," said Ginsburg, one of seven panelists who participated in the forum, which was sponsored by the Center for American Progress.

"The incentives resulting from our payment system are so discouraging for people choosing primary care. If we are going to be able to deliver good care for chronic disease, we have to turn that around quickly," said Ginsburg.

He warned that the nation is in danger of losing primary care as a specialty altogether without significant payment reform. And he called on the next administration and Congress to enact reforms that would better align payments with the relative cost of providing services.

Payment reform should entail "better mechanisms for payment," which could include multi-provider, per-episode payments for acute care and major illnesses and capitated payments for managing chronic disease.

Robert Berenson, M.D., a senior fellow at the Urban Institute, also called for major payment reform, saying that certain subspecialists earn two to three times more than family physicians or internists. This, in turn, has put primary care in peril.

"We are facing a crisis of an absence of primary care physicians," Berenson said. "Physicians of my generation are about to retire if the stock market goes up a little bit. In Medicare, we are going to have a real problem of access to care."

Berenson cited data underscoring the need for care coordination and primary care services. For example, 20 percent of Medicare patients suffer from five or more chronic conditions, see 14 different physicians, and take 60 prescriptions a year, according to Berenson. This creates the potential for different physicians ordering different prescriptions that might be incompatible, Berenson said.

In addition, said Berenson, "There is data to suggest that doctors give different diagnoses and patients are confused -- they really don't know what to do."

Twenty percent of Medicare patients admitted to a hospital are readmitted within a 30-day period. During the time between discharge and readmission, half of those patients do not see a health care professional of any type, which Berenson called "stunning." It is indicative of a system that lacks integration and care coordination, he said.

David Blumenthal, M.D., director of the Institute for Health Policy at Massachusetts General/Partners HealthCare System in Boston, said the federal government should take steps now to reinvigorate primary care. He called for more funding for the National Health Service Corps and an expansion of loan forgiveness programs to promote "long-term service in primary care."

During the forum, the panelists acknowledged that payment reform would require a shift in resources, resulting in winners and losers in the overall payment scheme. But they brushed aside concerns that some physicians would fight to maintain the status quo, saying that the health care system can no longer sustain the costs of doing nothing.

"There are a lot of people who will clearly go and defend their turf," said Berenson. "But they know (the system) is broken, and it is hard to defend what they are getting."

However, said Berenson, these physicians can be appealed to as long as they are sufficiently well compensated. "I think we can get beyond the current paradigm of each interest group fighting against each other," he said.