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Klobuchar Proposal to Reform Medicare Reimbursements Included in Baucus' Modified Health Care Bill

Mayo Clinic President and CEO reiterates need for Medicare to pay for value and thanks Klobuchar for her leadership Last week, Klobuchar led a group of 28 Senators in urging President Obama to reform Medicare to reward value, not volume

September 22, 2009

Washington, D.C. – U.S. Senator Amy Klobuchar’s proposal to reform Medicare to reward the value of care, instead of volume was included in Senate Finance Committee Chairman Max Baucus’ modified health care bill, which he unveiled today.  This change represents a historic transformation of the current Medicare payment system.  With Klobuchar’s proposal, offered in the Finance Committee by Senator Maria Cantwell (D-WA), Medicare will begin to incentivize and promote higher-quality, more efficient care for patients and lower health care costs.  

Klobuchar has been a leader on the effort to reform Medicare to include a “value index,” which would reward health care providers for the value of care they deliver, not the volume of services they provide. The change will ensure that Minnesota and other states that deliver high-quality, efficient care are rewarded for this care, instead of punished.  

Last week, Klobuchar and Cantwell led a group of 28 Senators in calling on President Obama to realign Medicare spending in order to provide greater value to beneficiaries and lower costs.

“The change included today will help control costs and get the most from our health care dollars.  This will strengthen the strong safety net of Medicare by ensuring funds are there to pay for our seniors' health care,” said Klobuchar.

Dr. Denis Cortese, President and CEO, Mayo Clinic said, “Mayo Clinic and the Mayo Clinic Health Policy Center strongly support the need for Medicare to pay for value. Indeed, paying for value in healthcare is one of the four cornerstones for reform that emerged from our consensus driven health policy process. Value is defined as the equation of quality (outcomes, safety and patient satisfaction) over the cost of care over time.

“We support inclusion of provisions in the Senate Finance Committee bill that help move Medicare in this direction. In particular, we express thanks to Senators Klobuchar and Cantwell for their efforts to strengthen the provisions in the Chairman's initial bill, and to Chairman Baucus for his leadership and support for moving Medicare toward a model that rewards value rather than volume."

“The biggest thing we can do in this bill for those with insurance is to reform Medicare fee for service and instead institute an efficient plan that rewards physicians not on volume, but on the value that they deliver to their constituents,” said Cantwell. “This change finally puts the patient first rather than putting the focus on how physicians get paid.”

Currently, Medicare does not take into account the value of care provided by physicians when determining their payments for providers. Despite past 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.  States that have historically delivered excessive procedures are still rewarded for the wasteful practices of the past, while efficient states such as Minnesota are punished.

The proposal included in Chairman Baucus’ revised mark requires that a “value index” be established as a method for paying all physicians.  The change to the Medicare payment system will be administered, beginning on 2012 by the Secretary of Health and Human Services.  The Secretary will work with to establish uniform definitions for quality that will become the basis for the index.  This proposal is budget neutral and takes into account justifiable differences in Medicare spending.  It is not contingent on a study as other proposals have provided.

Reforming Medicare to reward value will reduce the dramatic differences in Medicare spending throughout the nation and help move the nation to a coordinated, integrated delivery system – like Minnesota and other high efficiency states currently have.  Studies have shown that more integrated care could save taxpayers an additional $100 billion a year.


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