We’ve all heard about the problem of rising health care costs. The United States spends nearly three trillion dollars a year on health care – far more than any other developed country – yet lags on many measures of health outcomes and quality. As a proportion of the federal budget, the cost of Medicare has risen from 3.5 percent in 1975 to more than 15 percent in 2010. By 2020, Medicare is projected to consume 17 percent of the U.S. budget. So what can be done about it?
According to a report from the National Commission on Physician Payment Reform, a Burness client, changing the way doctors get paid is the first step to fixing our health care system. The report, released on March 4th, details 12 sweeping recommendations aimed at reining in health spending and improving quality of care. Among them, the Commission urges lawmakers, health providers and insurers to move away from a fee-for-service payment system to a blended payment model within five years.
The 14-member Commission was formed by the Society of General Internal Medicine and is led by former Senator Majority leader Bill Frist, M.D., and former Robert Wood Johnson Foundation president Steven Schroeder, M.D. In a joint Politico op-ed, Frist and Schroeder explain why fee-for-service is so problematic: “We pay physicians according to the number of services they provide. The skewed financial incentives inherent in a fee-for-service model promote fragmented care and encourage doctors to provide more — and more costly — care, regardless as to whether those services improve the health of patients.”