The Truven Health Blog

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Rewarding Medicare Doctors for Quality

By Michael L. Taylor/Friday, February 14, 2014

Mike Taylor imageI 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

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