Unbiased Analysis of Today's Healthcare Issues

Medicare to Pay for Value

Written By: Jason Shafrin - Jan• 31•15

I have spilled much ink on this blog discussing the pros and cons of pay-for-performance approaches to medicine.  Incentivizing high quality care is good in theory, but in practice changes in quality have been modest and providers may be able to readily game the system.  Despite these challenges, Medicare announced this week that it would being  tying 30 percent of “traditional, or fee-for-service Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016.”

To measure value, you need to be able to measure both cost and quality.  Cost is easy to measure but quality not so much.  The WSJ reports that “On Friday, the National Quality Forum, a nonprofit advisory group, submitted recommendations on 199 performance measures for Health and Human Services to consider in 20 federal programs.”

Many doctors are skeptical of administrative quality measures.

…there is little agreement on what measures matter most or are more likely to produce good value. “In many areas of patient care, we do not yet have high-quality outcome measures with enough specificity to drive improvement,” American Medical Association Executive Director James L. Madara wrote in a letter to the quality forum earlier this month.

Some doctors complain that whether patients get better is often out of their control; that outcomes measures take more work, not less; and that being held accountable for outcomes could prompt doctors to avoid treating the sickest patients.

More details on the announcement are available at this NEJM article.

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One Comment

  1. Scott Hodson says:

    Jason, I think you may not be giving the healthcare quality improvement community enough credit.

    While a patient’s ultimate outcome is often beyond a doctor’s control, and some providers do try to game the system, quality measures associated with the various Medicare quality-related reimbursement programs are clearly driving quality improvements among my health system clients.

    With the QBR program, efforts to improve the patient experience are driving a more patient centered approach to the care that is provided and improving the patient’s understanding of their condition and how to best care for themselves after hospitalization. Efforts to improve outcome measures are resulting in fewer serious infections and lower mortality. Efforts to achieve 100% process of care measures are not only resulting in all patients receiving evidence proven best practice treatments, but also teaching the hospital how to build quality into the workflow.

    Similarly, successful efforts to reduce readmissions have been effective at helping patients stay out of the hospital, and in doing so reduced the cost to the system (at the expense of reduced revenues for my clients) and increased the quality of the patient’s life. And efforts to reduce Hospital Acquired Conditions have reduced the frequency of dangerous and costly harm to the patient. To me, these are all clearly valid measures of Quality and worthy of pursuit.

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