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Klobuchar: Reform Medicare to Reward Value, not Volume

Klobuchar and Cantwell speak on Senate floor about their legislation to reward quality, efficient care

September 15, 2009

Washington, D.C. – This evening, U.S. Senator Amy Klobuchar spoke on the floor of the Senate to push for health care reform legislation to include her proposal to reform Medicare to reward value instead of volume.  Currently, states like Minnesota deliver efficient, high-quality care, yet are not rewarded for those practices.  In fact, the incentives reward low-efficiency states.

Klobuchar was joined on the floor by U.S. Senator Maria Cantwell (D-WA).  Klobuchar and Cantwell, along with Senator Judd Gregg (R-NH) have introduced the Medicare Payment Improvement Act, legislation to reform Medicare by paying providers for the quality, not quantity, of care. Klobuchar has pushed for health care reform to reward the value of care, control costs and promote integrated care.

“We need to change the way we pay for health care,” said Klobuchar.  “If we don’t act, costs will continue to skyrocket, hurting our families, businesses and government. To control costs and get the most out of our health care dollars, we need to have all health care providers aiming for high-quality, cost-effective results, like we have in Minnesota. But right now, Medicare doesn’t reward this type of care. 

“We must reform Medicare to pay doctors for the quality of care they provide instead of the quantity.  By taking this step, we can rein in costs and make health care coverage more affordable and more accessible for our citizens.”

The Medicare Payment Improvement Act would reform Medicare by paying providers for the quality, not quantity, of care.  These changes would reduce the dramatic differences in Medicare spending throughout the nation and help move the nation to a coordinated, integrated delivery system – like Minnesota, Washington and other high efficiency states currently have.

Currently, Medicare does not take into account the value of care provided by physicians when determining their payments for providers. Despite periodic efforts at reform, Medicare pays for volume, not value. More tests and more surgeries mean more money – even if the extra tests and operations do nothing to improve a patient’s condition. 

Specifically, the legislation would increase efficiency by creating a value index within the formula used to determine Medicare physician fees. Linking rewards to the outcomes for the entire payment area creates the incentive for physicians and hospitals to work together to improve quality and use resources efficiently.  Studies have shown that more integrated care could save taxpayers an additional $100 billion a year.

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