Mayo Leader Proposes Major Restructuring of System
As the Senate Finance Committee moves toward a final vote on a healthcare reform measure, and as a bill based principally on this measure approaches a vote in the full Senate, it is clear to many observers that the legislation-like the bills being melded in the House-still lacks significant cost control components. But advocates of more sweeping reforms aren't keeping quiet, and it's likely that some of their arguments will influence future efforts to build on the current legislation.
One of the leading voices proposing more fundamental reform is that of Denise Cortese, MD, the highly respected CEO of the Mayo Clinic. Cortese, who earlier this year assailed the concept of paying providers Medicare-level fees in a public plan, supports the idea-embodied in Finance Committee Chairman Max Baucus' bill-of paying providers on the basis of the value they provide, rather than the volume of services they render. But he would move much more rapidly than the Baucus bill would to convert the Medicare system to value-based purchasing.
In an article in the New England Journal of Medicine, Cortese and coauthor Jeffrey Korsmo propose that Congress start the ball rolling immediately:
"We believe that Congress should set a 3-year deadline for creating and implementing new Medicare payment methods. The CMS could initially establish new value-based payment methods, incorporating metrics for outcomes, safety, and service for the most expensive three to five conditions and procedures --sending providers the message that they must begin reengineering care delivery to create better value for patients."
The authors say that the value scores could be applied to any form of Medicare payment, "including hospital diagnosis-related-group payments, physicians' fees, payment updates, and other payment formulas, including those for bundled payments." While this approach would affect only part of provider reimbursement at first, they don't rule out extending it to all Medicare payments. And, eventually, they would like to see the entire system-including private payers-follow suit.In contrast, the Baucus bill would provide value-based incentives and disincentives of only 1 percent of Medicare hospital payments, rising to 2 percent in later years. Physician payments would not be geared to value at all, except for a 5 percent penalty on the least efficient doctors, starting in 2015.
Cortese and Korsmo also call for all physicians to join together in larger units to improve the quality and coordination of care. "Physicians can organize themselves in a variety of ways--group practices, integrated networks of independent physicians, physician-hospital organizations, or "virtual" groups--to accomplish this goal," they write.
This a fine idea, with the proviso that these organizations become business units capable of competing in the market. Also, it is these provider groups, not insurers, that should compete on value. Insurance companies should have a subsidiary role in the new healthcare paradigm.
It's great that the Mayo Clinic is taking the lead in proposing fundamental restructuring of the healthcare delivery system. The worldwide reputation of this organization should get the attention of policy makers. But it's a shame that Congress is still not ready to make the leap that Cortese and like-minded reformers know is required.