The National Commission on Physician Payment Reform begins its 24-page report on physician payment reform with a quote that says, “Our nation cannot control runaway medical spending without fundamentally changing how physicians are paid.”
The 14-member commission was tasked with assessing the current physician payment system and making recommendations on how new payment systems can reduce overall healthcare costs. The report says healthcare spending continues to squeeze the American budget without producing improved outcomes. In fact, the World Health Organization ranks the US 37th on its list of nations according to health status. The Commission concluded that the current fee-for-service model incentivizes physicians to perform more expensive tests and procedures without regard for the patient’s overall health.
The system also forces physicians who perform evaluation and management services to schedule shorter appointments with patients in order to increase volume and reimbursement. This combination means that physicians have a greater economic incentive to treat illness, than they do to prevent illness from happening. The Commission created a list of 12 recommendations that it believes will reduce healthcare costs and improve the nation’s wellness, many of which will benefit independent primary care physicians. First, the Commission recommends annual increases in evaluation and management payments, which it believes are undervalued. At the same time, it endorses freezing diagnostic procedure payments, which the Commission believes are overvalued and leading to increasing costs.
The Commission also recommends closing the gap between payments made to outpatient clinics and physician offices. A MedPAC report noted that Medicare pays 80% more for a 15-minute office visit in an outpatient department than in a freestanding physician office. Medicare pays also pays $450 for an echocardiogram done in a hospital and only $180 for the same procedure in a physician’s office. The Commission says this disparity in payment is threatening the viability of independent physicians and raises the cost of care. The Commission also recommends payers reimburse small practices that use telemedicine to create virtual networks with other providers and deliver comprehensive care to patients. Finally, the Commission endorses the elimination of the Sustainable Growth Rate (SGR) formula, which is an idea that almost every physician supports. It is unclear whether any of the Commission’s recommendations will become reality.
Read the full list at Commission’s website.
