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Letters to health-care Santa: More payment reform in Medicare

Gail_Wilensky.jpgOver the course of this week, I'll be asking some health-care experts what they'd like Santa to add to the bill during conference committee, and publishing their responses on the blog. This missive is from Gail Wilensky, who chaired MedPAC from 1997 to 2001 and administered the Health Care Financing Administration between 1990 and 1992. Currently, she's a senior fellow at project HOPE, which focuses on international health care.

The Senate health care reform bill, like the House bill, has morphed into a health insurance reform with precious little in the way of reform to the delivery system. Although both bills have a variety of interesting and promising pilots that, if done quickly and aggressively, could provide workable strategies that could substantially reshape the delivery system, that is a very large “if” that could be derailed in multiple places given the enormity of change in this complicated and complex piece of legislation and the history of promising demonstrations that never made it into new legislation.

Aside from this general cause of frustration, for me, the single biggest disappointment is the lack of attention and funding given to reforming the way physicians are reimbursed under Medicare. It is impossible for me to imagine a reformed delivery system where physicians continue to be reimbursed under the current relative value scale, billing Medicare for approximately 8,000 different items. While there are pilots to try what has been termed accountable care organizations where physicians can work together and share savings produced by better coordinating the care provided, and a voluntary hospital and physician bundling pilot, these are pretty tepid responses given the enormity of the problem of redesigning a physician payment system.

Moving to a new “bundled” payment system for physicians, where physicians are paid for treating a patient's chronic disease(s) and paid as a group for providing acute care interventions -- which is what I believe ultimately is needed -- will also have to deal with the $210-$250 billion hole that the Congress has dug for itself over the last 7 years with its one-year “patches” to the current reimbursement. To do otherwise will be to increase the debt by another one-quarter of a trillion dollars over the next decade. The initial rationale given as to why this was being ignored was the problem was independent of health care reform — which is true, but more credible before as much saving as was deemed politically possible was taken from Medicare. This now becomes a much more serious problem.

Earlier in this series, Diane Archer called for Congress to create national exchanges rather than state exchanges, Alain Enthoven offered some ideas for how to fix the exchanges, David Cutler proposed a soda tax, Austin Frakt argued for competition in the Medicare Advantage program, Jacob Hacker broached letting the public sector help the private sector negotiate lower rates, George Halvorson tried to expand the exchanges to include providers of actual care rather than just insurance coverage, Henry Aaron wants the death panels back, Jon Gruber wants the House's definition of decent insurance coverage to prevail, Victor Fuchs would like to turn the exchanges over to Ron Wyden, Harold Pollack thinks it's time to cut the waiting period for the disabled, Matthew Holt wants to let our data free, and Andy Stern urged people to strengthen the subsidies.

By Ezra Klein  |  December 23, 2009; 6:05 PM ET
Categories:  Health Reform  
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Comments

Sensible comments, but doesn't she strongly resemble Michele Bachmann?

Posted by: TheLev | December 23, 2009 7:22 PM | Report abuse

This lady is obviously trying to rehabilitate her image after a year spent ruining health reform. Thanks a bunch, Gail!

Bundling is the favored panacea of people who know it will be extremely difficult to implement on a large scale. You have to have the infrastructure in place--the HMOs and ACOs--before bundling can be successful. That day is still a long way off.

Posted by: bmull | December 23, 2009 7:46 PM | Report abuse

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