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Increasing Medicare Physician Payments Could Improve Quality Of Care

Ruzanna Harutyunyan's picture

An increase in Medicare reimbursements for primary care, revisions to the current payment system and a pilot program to test the use of medical homes for beneficiaries could lead to major changes in the U.S. health care system, witnesses said at a Senate Finance Committee hearing on Tuesday, CQ HealthBeat reports. The hearing marked the latest in a series held by the committee to discuss issues related to health care reform. Previous hearings addressed efforts to reduce health care costs, expand access to care and improve quality of care.


During the latest hearing, witnesses cited the need to increase Medicare reimbursements for primary care, as current payment rates have discouraged entry into the field by medical students and have led to shortages of primary care physicians, general internists and general surgeons. According to Robert Berenson, senior fellow at the Urban Institute, current Medicare reimbursements for primary care have encouraged medical students to enter specialties -- such as radiology, orthopedics, anesthesiology and dermatology -- that "in addition to being highly remunerative also support gentler lifestyles, usually without emergencies outside of regular work hours."

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Mark Miller, executive director of the Medicare Payment Advisory Commission, also said the Medicare fee-for-service program, which has separate reimbursement "silos" for different services, does not encourage coordination of care for beneficiaries. He said, "We must now move beyond those limitations -- creating new payment systems that will encourage providers to change how they interact with each other," adding, "Providers need to increase care coordination and be jointly accountable for quality and resource use."

Witnesses also said that a Medicare pilot program to test the use of medical homes for beneficiaries with chronic conditions could help determine whether such programs would help reduce costs and improve coordination of care. Glenn Steele -- president and CEO of Geisinger Health System, which operates such a program -- said that medical homes allow staff to "get to know the patients and their families, follow their care, help them get access to specialists and social services, follow them when they are admitted to a hospital, contact them to confirm that they are taking the appropriate medication dosages and are available for advice 24 hours a day."

Baucus Comments

Committee Chair Max Baucus (D-Mont.) said that the health care system, which in most cases reimburses providers based on the number of services performed rather than the quality of care delivered, causes many patients to receive unnecessary tests, "inadvisable prescriptions" and expensive surgeries, "only to be ignored when they leave the hospital." According to Baucus, costs related to unnecessary and low-quality care account for more than 30 cents of every dollar spent on health care, or more than $600 billion annually (Carey, CQ HealthBeat, 9/16).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.