News About CHQPR

CHQPR Testimony to Congress

On May 5, 2011, CHQPR Executive Director Harold D. Miller gave invited testimony to the U.S. House of Representatives' Committee on Energy and Commerce at its hearing on how to replace the Sustainable Growth Rate formula.

Miller urged that Congress focus on three major ways to control costs in the Medicare and Medicaid programs without having to deny care that patients need:

by preventing diseases from occurring in the first place;
by helping patients manage chronic diseases and other conditions so they don't have to be hospitalized as often; and
by reducing the high rate of infections, complications, and readmissions that occur today when patients do have to be hospitalized.

Miller noted that all of those things not only save money but improve outcomes for patients. But he said that current payment systems drive the healthcare system in exactly the opposite direction. Doctors and hospitals lose money when they reduce infections and readmissions; doctors and hospitals lose money when they help patients avoid unnecessary hospitalizations; and nobody in health care gets paid at all when patients stay well. He emphasized that those things can't be fixed by changing fee levels or by adding regulations; the payment system itself is broken and has to be fundamentally changed.

He called for two major kinds of payment reforms:

One is episode-of-care payment, where physicians and hospitals are jointly paid a single price for all of the services associated with a hospitalization or procedure, including a warranty stating that they will treat any related infections and complications at no extra charge. This is the same approach that every industry uses for selling products and services and it can be done in healthcare, too.
The other is comprehensive care payment, where a physician practice receives a single payment for all of the care a patient needs for their chronic diseases or other conditions.

Miller said that paying in these ways provides the flexibility that physicians need to deliver better care as well as accountability for costs. He noted that where these payment systems have been used, they have improved quality and lowered costs. He said that a myth that has developed is that only large, integrated delivery systems can manage such payments and deliver higher-value care, but he said that small, independent physician practices can also do so. Indeed, he emphasized that just like in every other industry, small healthcare providers can often be more efficient and innovative than large systems can, if they are given the opportunity to do so without imposing unnecessary and expensive regulatory requirements.

Miller noted that he had talked to physicians all over the country about these payment reform concepts, and had found that once physicians understand them, they were willing to embrace them. But he said that physicians need assistance to implement new payment models successfully, and they need a reasonable transition period. He said physicians need four kinds of help:

First, physicians need data on utilization and costs, and they need useful analysis of those data. Physicians today typically can't find out how often their patients are being hospitalized, going to the ER, being readmitted, or getting duplicate tests. Electronic Health Records alone won't solve this, nor will typical published measures of quality and cost.
Second, physicians need training and coaching to help them restructure their practices so they can deliver more efficient and higher quality care. Not only is this kind of re-engineering not taught in medical school, it is hard for physicians to do it and still keep up with the demands of ongoing patient care.
Third, physicians need transitional payment reforms that will enable them to restructure the way they deliver care without risking bankruptcy. These transitional payment reforms can be designed in ways that can improve quality for patients and still save Medicare and other payers money.
Fourth, physicians need to have all payers - Medicare, Medicaid, and commercial health plans - make these payment changes and do so in similar ways.

Miller said he felt the best way to organize this help was not through a one-size-fits-all federal program, but through community-level efforts, because healthcare is delivered in very different ways in different parts of the country. He noted that in a growing number of communities around the country, there are non-profit, multi-stakeholder organizations called Regional Health Improvement Collaboratives that are working to provide the data and technical assistance that physicians, hospitals, employers, health plans, and consumers need to design and implement better payment and delivery systems that are customized to the needs of their communities. He said that Congress could help these Regional Health Improvement Collaboratives and other community efforts to support payment reforms for physicians in several ways:

by giving Collaboratives access to Medicare data so they can help physicians identify the best opportunities to improve quality and reduce costs;
by giving them some modest federal funding so they can provide the hands-on help that physician practices need to reduce costs elsewhere in the system.
by encouraging or requiring Medicare to participate in the multi-payer payment and delivery reforms their communities design.

CHQPR in the News

Paying for Quality, Not Quality (KBIA, 10/28/11)
Bundled Payment May Provide Opportunities for Family Medicine (AAFP News Now, 8/31/11)
Accountable Care Organizations, Explained (National Public Radio, 1/18/11)