Proposed SGR Fix No Bargain for Physicians

February 20, 2014

Value-based payment legislation would reward compliance over physician performance, stripping the value from healthcare delivery reform.

The AMA is backing a bipartisan movement in Congress to replace the annual Sustainable Growth Rate formula and replace it with a value-based reimbursement system for Medicare. Other physician groups are demanding a seat at the table to help determine metrics and transparency.

For independent physicians and less formal integrated entities, this shift toward value-based metrics may be yet another unfunded, regulatory nightmare with the resultant financial and administrative burden. It would threaten an uncertain, and likely insufficient return before the first dollar of savings is ever realized.

Look at it this way. Accountable Care Organizations have invested millions, have yet to see the first dollar in shared savings, and consider themselves successful if they drive a few percentage points in savings. 

Extending that model to all physicians by adding a few thousand pages of new legislation prompting HHS and CMS to churn out tens of thousands of pages of new regulations leaves everyone on the wrong side of any conceivable workable solution.

Our healthcare system suffers from being overly complex and cries out for simple solutions.

Accountable care, while a solid concept, skews the accountability to bureaucrats, not patients. Transparency in pricing and performance is meaningless if providers are not around to compete.

Meeting metrics is critical, but the metrics need to be limited, simple, and reasonable so that the outcomes are maximized and teaching to the test is minimized. Complying with regulatory mandates does not cut rampant waste, it piles it on. This is the sort of legislation that compounds the problem instead of solving it.

It is entirely consistent with Obamacare’s premise that spreading the trillions spent on a bloated, fragmented, already overregulated health insurance  system over more people, and dumping these added costs on employers and families while reducing reimbursements to those that actually deliver care, will somehow reduce instead of encourage the hundreds of billions spent on unnecessary services every year.

We simple folk out here in the real world must be missing something because, to us, the solution is so obvious that it screams for attention: effectively manage chronic disease and the system will get well, too.

Chronic disease consumes 80 percent of the overall cost of healthcare and 96 percent of Medicare. It is treatable and manageable.  It can be stalled, reversed and prevented. Let us invest in reducing its toll instead of spreading the cost and piling on more regulations that steal time, attention, and resources from a solution to the root of the problem.

Oh, and instead of starving out the primary-care physicians and their specialty teams by fixating on fees instead of value, reward and enable physicians for improving health status across their populations.

Over half of the cost of healthcare goes to hospitalization and procedures.

Healthy people, including those with stable chronic disease, don’t get admitted, radiated, imaged or operated upon.

Let the free market work and it will deliver miracles.

Speak up, folks. Once burned, shame on them. Twice burned, shame on you.