Lola Butcher

I was lucky to interview Donald W. Fisher,  president and CEO of the American Medical Group Association (AMGA), a trade association that represents medical groups, including some of the nation’s largest, most influential integrated health care delivery systems.  

AMGA’s membership includes medical groups that deliver health care to more than 50 million Americans in 42 states.

Butcher: What have we learned from the many pay for performance programs that are already in place?

Fisher: I think probably what we’ve learned from the get-go is that pay for performance just in and of itself does not go far enough, that if you build onto a current perverse reimbursement system incentives to kind of pay for assumed outcomes, you’re just going to get some small incremental improvements, but you’re never going to really get us to where we need to be with a new reimbursement system that really rewards quality and efficiency. Our current system which is built on volume and through-put simply will never get us there, so we need a whole new reimbursement system. I think that’s probably what we’ve learned the most is that it’s a great first step. It’s got us thinking about a new culture of payment that we need to change what we’re currently doing, but it’s not the final destination. It’s just a stop along our journey.

Butcher:  How soon do you see real payment reform coming, and do you foresee this as something that will happen gradually or are we getting ready for a rapid shift in the way care is paid for?

Fisher: I would like nothing more than to see a rapid shift to move completely away from the fee for service through-put model into something new. There’s a whole lot of proposals on the table that will get us there. I say that simply because we continue to pay for…the poorest quality gets paid the most in this country, and the less efficient providers get rewarded the same as the efficient providers. In fact, the efficient providers often get penalized for providing care efficiently and high quality. I’d prefer a rapid shift. My gut, though, says that it probably won’t happen that way. It will be incremental. There will be a lot of pilots. There will be testing of different payment mechanisms that will go on over the next three to five years, but we’ve got to have something by 2015 to 2018, because that’s when the babyboomers will be enrolled in Medicare in 2011, growing in significant numbers each year. They’re going to start to hit some chronic care conditions that are going to really drive our costs through the ceiling by 2015 to 2020.  I think it will be incremental. I’d love to see it be a rapid shift.

Butcher: Who do you think will initiate payment reform? Will this come from Medicare – I’m familiar with the MedPAC proposal – or private payers or perhaps providers themselves?

Fisher: When I look at this, I think that probably the drivers are going to be the employers and the providers themselves. I really don’t see Congress being the lead in creating health care reform. You kind of have a chicken/egg. You’ve got this large Medicare program which consumes most of the dollars in health care in this country, but yet you’ve got them governed by a Congress that has a very politicized way of looking at things. So it’s very difficult to get through the politics to do what’s really right for Medicare beneficiaries, and it’s really difficult to make changes in the system. My guess is it probably won’t come from Congress at the initial site. You’ll see a lot of things going on in the commercial side, a lot of experimentation pushed by providers as well as the employer community.

I was lucky to interview Stuart Guterman, senior program director of the Medicare’s Future program at the Commonwealth Fund. A couple of things that caught my attention:

Lola: How should value in health care be measured, and do we need more measures or fewer?

Guterman:  That’s really the crucial issue. There has been a lot of discussion about paying for outcomes, and certainly one can make a strong case that how the patients survives the health care, what the health status of the patient is in the long run is really the bottom line. But I think we are where we are on being able to pay for quality because we’ve developed a set of more reliable process measures, that is measures of how services are provided that are expected to lead to better outcomes. So we now can put together a list of things that are pretty much accepted as ways health care should be provided that will lead to better outcomes.

In terms of more measures or fewer, there are arguments for fewer measures because a long list of measures is thought to present the prospect of confusion. I think that actually if you have a longer list of measures and if you really are comprehensive in the list of measures for what you pay for, then you’re really transmitting a broader message that the objective is to improve quality and improve the value that you get for the health care dollar.  I think that’s really the message that needs to be sent in value-based purchasing, not doctors should do this or doctors should do that. Doctors should really do a broad range of things that lead to better health for their patients.

Lola: How should providers be rewarded for value?

Guterman:  There are different ways to approach rewarding for value. Certainly you want to reward providers that provide the best care.  There have been studies that found, however, that if you rely only those kinds of measures, then you end up basically making most of your bonus payments to providers who already are at the level that you’re looking for.  If you’re really trying to improve the system, then you need to provide incentives for providers that aren’t where you’d like them to be to get where you’d like them to be.

So I think at some point you need to be able to reward improvement over time, and I think you also, when we have more information and we’re able to be more confident about setting levels of acceptable care, that we might want to pay on that as well. I think a good pay for performance system will basically incorporate measures of all three types of good performance so that we can have rewards for the folks who do it right, incentives for the folks who aren’t quite there yet but are improving, and then some more explicit recognition of the fact that you really need to be at a certain level in order to be considered a top-notch provider.

It is always surprising to me that physicians perceive themselves to be victims of America’s health care crisis when, in fact, they are the only ones that can save the system. I don’t blame physicians for the problems–there is too much blame to go around to pin it on just one group–but physicians alone have the power to sabotage any proposed reforms.

That’s real power, and that means physicians must be on board with any changes designed to return from the brink. And the only way they will be truly on board is if they help design the changes. Physicians, America needs you to apply the intelligence that got you through medical school to the nation’s health care quality and cost crisis. No, most of you did not sign up for this when you decided to become a physician, but you are the key to solving this mess. So please, proceed with haste.

Robert Laszewski, president of Health Policy and Strategy Associates and one of health care’s truth tellers, says this nicely in his recent post.

The Medicare Payment Advisory Commission, which guides the nation’s largest health care payer, is suggesting major changes to the way health care is delivered in America.