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The Business of Quality


A new plan for paying physicians for providing higher quality care

I pay more to the dry cleaner in town that returns my clothes looking like new than the one who leaves a few wrinkles here and there. I'd expect to pay more to drive a new BMW instead of a 1984 Chevy. In most industries, you pay more for quality.


But not in healthcare.


Physicians are paid for following documentation guidelines. In our payment system, providing model care -- for example, spending a lot of unreimbursed time counseling patients on nutrition -- can make you go broke.


Physicians earn more by seeing more patients in the same amount of time. Hardly a way to improve care.


True, some payers will pay a bit more to physicians who meet certain quality-related goals. But not every payer is interested, the administrative burden of proving compliance can be prohibitive, and the payments are usually quite small.


Enter "The Business Case for Quality." Alice Gosfield, a healthcare attorney and occasional contributor to Physicians Practice, and James Reinertsen, MD, a former health system CEO who is now president of The Reinertsen Group, a consulting and education firm, are leading the charge to create a case for quality healthcare that makes sense to accountants.


Specifically, they propose using clinical practice guidelines as a basis for reimbursement. Payers could identify ICD-9 and CPT codes that physicians would bill if they follow a particular clinical guideline. Payers would reimburse physicians based on whether the guideline was followed.


Tying CPT codes to medically approved protocols lets payers continue to substantiate the care provided -- using the current system of CPT codes -- while simultaneously improving patient care and physician morale. In addition, Gosfield and Reinertsen propose switching to cost-based payments. Using the CPT/ guideline-based system, payers could identify what it actually costs a physician to provide a particular service and reimburse accordingly.


The end results? Documentation and care that are founded on evidence-based medicine, more consistency in patient care, and less paperwork.


This is an idyllic picture, of course.


To date, some physicians have been skeptical of clinical guidelines. But the bigger challenge is getting payers to reimburse on a cost basis. Persuading them to embrace anything that will increase their costs is a tough sell. Still, payers will reap cost savings if physicians follow protocols -- especially around chronic diseases -- that keep patients healthier.


Despite these hurdles, it is refreshing to think about shifts that reconcile the disparate players in healthcare in the name of quality without requiring an improbable change in how physicians get paid.

To learn more about the project, visit www.uft-a.com. You can read the white paper, join a listserv, and join the conversation in other ways. It's the most practical but optimistic discussion I've overheard in some time.


Send your feedback on this or other topics you'd like to see covered here to Pamela Moore, senior editor, practice management, at pmoore@physicianspractice.com We may publish comments received in future issues of Physicians Practice.

This article originally appeared in the September 2003 issue of Physicians Practice.


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