Payment reform gets a lot of lip service in the new New York (Washington, D.C.) as a key to reform and cost containment. But will it really happen? The Avalere health policy think tank and ACC co-sponsored a major meeting in Washington last week for policy wonks and government types on payment reform as a key element of health care reform. It was called Raising the Bar—Payment Reform in System Reform. Some physician attendees were likely more ready to "visit the bar" than "raise it" after hearing what may be coming in these regards.

Interestingly, while all the Senate and House reform proposals seem to be heavily engaged in payment reform strategy, payment reform of the kind that will be needed to “bend the cost curve” has been prosaic rather than specific, and the CBO refuses to score any savings due to payment reform without years of evidence. So will payment reform be more than rhetoric?

The "Have" and "Have-Nots"?
Our intelligence suggests that the administration may try to assuage physician angst and anger over the decade of SGRrrr flat payments (with rising business costs) by offering a 5 percent boost in Medicare fee-for-service payments for everybody in 2010. Congress may not agree. But, this could be a carrot to get physician support for health care reform, and to swallow the bitter pill that the SGRrrr may not be permanently fixed this year (AMA still thinks it will happen, but don’t hold the breath). A different source says that the integrated systems (a.k.a. in reform lingo “accountable care organizations”) could get much bigger potential increases of perhaps 15 – 20%. 

In other words, payment reform may create “have” and “have-not” classes of physicians based on willingness to be in physician-hospital integrated systems. For many independent smaller practices that remain in fee-for-service that will mean flat pay, or becoming employed by or sublimated to hospitals, a notion that many cardiologists may find unattractive or even alarming for the long term. [more]

Market-Based Salaries
Given the absurdity and complexity of the current payment structure, and its failed performance in keeping payments consistent with rising costs of practice, I actually hope that the future allows physicians to be paid increasingly by market-based salaries, with significant incentives for productivity, quality and outcomes (and perhaps patient satisfaction). Salaries would far better reflect the worth of a physician in the real marketplace, whereas nickel and dime-ing petty increments on fee-for-service payments to determine income most certainly do not.

Physicians could more easily and collectively negotiate on a salary basis in a better future than we can promote practice viability in the complexity of fee-for-service payment systems. And, physicians certainly could have options besides just being employed by hospitals or health systems, including forming medical groups or independent practice associations that are physician-directed entities (and that could better remain the unfettered advocates of patients). 

Let's Take the Lead
My recent and exciting trip to Bangalore, India, reminds me that the incredible innovation I saw there was largely the result of physicians leading the process of system design, development, and financing, including oversight of hospitals and insurance models. We have long abrogated these responsibilities to others in the U.S. (at our peril), and to the ultimate disadvantage of patients.

If the future is ultimately best to be a more integrated one (and from the point of view of most medical students, residents and fellows of today, it certainly seems likely to be), physicians need to take back the leadership of health institutions (including more involvement in hospital governance) on behalf of patients -- if the future is really going to be patient-centered and evidence-based. OK, I’ll get off my soap box now…

*** Image from Flickr (Annie in Beziers). ***

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