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Statement of Steven Wojcik, National Business
Group on Health
Congress Should Implement Medicare
Pay-For-Performance Now
Issue: Congress is considering legislation that would
implement value-based purchasing, or pay-for-performance, on a program-wide
basis in Medicare. Pay-for-performance programs reward health care providers
for quality care and efficiency through higher reimbursement and payments.
Too often, payment for health care is
made without regard to whether services are needed or how well they are
performed. While cost is tied to quality or performance in most other
industries, in health care, including in Medicare, the opposite tends to
happen—we end up paying more for poor service and the additional health care
needed to “correct” poor quality.
The pay-for-performance movement
continues to rapidly expand in the marketplace. In recent years, employers and
other health care purchasers have developed and adopted payment programs to
reward quality and efficiency in the health care system. For example, several
of the Business Group’s employer members participate in Bridges to Excellence
and the pay-for-performance program of the Integrated Healthcare Association,
two of the leading movements. Today, most large insurers and health plans have
a provider incentive program. The Medicare program has several pay-for-performance
demonstrations underway.
Pay-for-performance promises to advance
evidence-based medicine, improve the quality of health care and the health of
Medicare beneficiaries, which translates into better value for the Medicare
program.
Position: The National Business Group on Health, a member organization of over
240 primarily large employers who provide coverage for 50 million Americans,
strongly urges Congress to pass legislation that would implement
pay-for-performance on a widespread basis in the Medicare program for
hospitals, physicians, and other health care facilities and professionals.
Pay-for-performance in Medicare would harness the government’s leverage as the
largest purchaser of health care in the U.S. to improve the quality and
efficiency of Medicare and the overall health care system.
The Business Group believes that a
Medicare pay-for-performance program should include the following:
- The performance measures adopted by
Medicare should be measures developed by nationally recognized quality
measurement organizations, such as the National Committee for Quality
Assurance (NCQA), researchers, and practitioner groups that have been
vetted and recommended by consensus-building organizations that represent
diverse stakeholders, such as the National Quality Forum (NQF).
- Rewarding quality is paramount but
rewarding quality care that is provided efficiently is also important and
should be an essential part of any pay-for-performance initiative in
Medicare.
- When measuring quality, focusing on
misuse and overuse is equally important as underuse.
- To the extent possible, performance
measures should incorporate outcomes of care in addition to structure and
process measures
- CMS should make meaningful
disclosure of performance results to the public, which will reinforce the
value of pay-for-performance.
- The health care system will need
sufficient health information technology infrastructure to report
performance measures. Some providers, particularly solo and small group
physician practices and those serving low-income urban and rural areas,
may need financial assistance to purchase needed systems, software,
training and related services.
- The Medicare program should
consider expanding the proportion of Medicare payment and reimbursement
based on performance over time as it implements pay-for-performance.
Pay-for-Performance
in Medicare is Needed Now to Improve Quality and Safety:
A landmark 1999 Institute of Medicine (IOM) report estimated that
preventable medical errors in hospitals might cause as many as 98,000 deaths
annually. Many more people are injured in hospitals and countless more
preventable deaths and injuries occur in outpatient settings.
A 2003 RAND study found that patients
received only 55 percent of recommended care for fairly common medical
conditions for which a broad consensus exists on care standards.
The Dartmouth Atlas of Health Care’s
most recent findings reveal wide variation in hospital care and outcomes for
chronically ill Medicare patients.
Fisher and colleagues (Annals of Internal
Medicine, 2003) estimate that up to 30% of Medicare spending may be for
excessive and unnecessary care.
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