This week’s theme in the New New York (DC) seems to have been payment reform. I was at several meetings recently where this was the topic du jour, and the most consistent message emanating from these various discussions is that volume-based reimbursement (fee-for-service or FFS) has to go. Maybe not immediately, but as soon as possible, and by design.

What to do About it?
Interestingly, most physicians I talk with about this basically agree, but like everybody else in the discussion we are having trouble envisioning what can replace FFS that could work for physicians, nurses, pharmacists and hospitals NOT in integrated systems or under salaried reimbursement. A surprising number of ACC members — including CCAs — are paid by salary, with or without incentives, but a lot of members aren’t. For the 85 percent of American health care providers not in integrated systems or salaried practices, the payment reform ideas (bundling, episodes of care, medical home) will be tough to participate in. The new payment incentives will likely be voluntary and only available to “Accountable Care Organizations” (ACOs) -- meaning integrated systems.

Everybody else will likely be left in an undermined FFS vestigial world. The idea will be to let FFS die and take the dinosaurs with it by attrition. Even if the SGRrrr is fixed for 10 years, any increases proposed are minimal in the current scenarios for FFS Medicare. Two percent for the PQRI reporting bonus will hardly get people excited, nor even keep up with inflation of business costs.

That’s why ACC is looking for ways to create a real upside based on gainsharing or innovative payment strategies related to improving adherence to guidelines and AUC, reducing re-admissions and systematically reducing variation (as compared to having somebody else do that for us or to us). White House and OMB leaders informed me last week that when the AMA and other Gang of Six constituency leaders recently promised Mr. Obama $2 trillion in savings (see more on that in the video below), ACC’s strategies on preventing re-admissions, applying AUC to improve imaging and working on reducing variation, were the most specific things they heard from these groups.

Making it Work
Somebody's listening to us, and in fact we could deliver on these promises. But we will need some incentives to get the ball rolling, and some pilot projects to develop proof of concept, or the Congressional Budget Office (CBO) will be heard laughing in the background. They don’t mark up savings until they see the money on the table. Nonetheless, we’re part of the discussion, at we’re going to convince them they need to take a little risk -- after all we are risking a lot, too.

But I wouldn’t stake my practice future on a FFS reimbursement system for many more years into the future.

[youtuber youtube='http://www.youtube.com/watch?v=D7qgSr-4ptY'] 

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