View: Doctor-pay reform crawls at the speed of Medicare

(Bloomberg View) — Paying doctors a fee for each service they provide gives them incentive to offer the maximum number of treatments, as well as pay less attention to how well patients recover. This is why the Barack Obama administration — and just about everyone else — wants to change the way doctors get paid.

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But as the administration’s latest step away from the fee-for-service model illustrates, it’s doing too little, too slowly to accomplish the change that’s needed.

On Monday, the Centers for Medicare & Medicaid Services (CMS) announced its latest payment-reform project, this one aimed at primary-care doctors: a hybrid of fee-for-service and general per-patient payments — that is, a flat fee paid to doctors for keeping patients healthy.

It’s a sensible approach. But it’s also voluntary — only 20,000 of the 290,000 primary-care doctors practicing in the U.S. are expected to participate. And it follows more than 60 similar payment-reform programs that CMS has announced or tried. The list includes nine other primary-care projects, 10 accountable-care models (in which various health-care providers coordinate care for a group of patients), and 10 kinds of so-called episode-based payments (in which doctors get a flat fee to address patients’ specific ailments).

Imagine being a doctor trying to keep up with so many boutique initiatives. As large as these are in number, they don’t add up to broad reform. At some point, changing the way doctors are paid requires moving beyond pilot projects.

The administration’s expressed goal is to have 50 percent of Medicare payments tied to quality of care by the end of 2018. President Obama announced last month that 30 percent now fit the criteria.

Getting to 50 percent is essential to lowering the cost of health care in the U.S. This year, federal spending on Medicare will probably amount to 3.8 percent of gross domestic product, with almost half of it financed by borrowing. And even though the Patient Protection and Affordable Care Act (PPACA), aka Obamacare, has slowed the growth of Medicare costs, that percentage is still expected to reach 4.4 percent of GDP by the middle of the next decade.   

Limiting Medicare growth shouldn’t require imposing a new doctor-payment system overnight. But it’s certainly possible to move more quickly.