The Daily Signal

Obama Wants Doctors Paid Differently. Here’s the Downsides to His Proposed Way.

President Obama. (Photo: White House flickr.)

 As part of the 5-year anniversary White House celebration of his health care law, President Obama included his goals for health reform going forward.

Among those goals is a blindly ambitious attempt to link health care payments to value.

The Obama administration  wants to base payments on quality and to incentivize doctors to spend more time with patients. But there are downsides to this approach.

Obama’s remarks follow the recent announcement from Health and Human Services Secretary Sylvia Mathews Burwell regarding the agency’s goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as accountable care organizations, which are networks of various health care providers working (and getting paid) together, or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018. Health and Human Services also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018.

Although quality, value and more time for patient care are laudable goals, there are serious problems with the president’s ambitious timeline. First of all, the evidence so far indicates that transitioning doctors into alternative payment models will not provide them with more time to spend with patients and simply labelling health care delivery as “patient-centered” will not improve the patient-doctor relationship.

A recent analysis by the RAND Corporation found that, so far, alternative health care models have had the effect of increasing the overall quantity and intensity of physician work because of growing patient volume expectations. The study also found that the multiplicity of pay-for-performance and other incentive programs has created a heavy administrative burden for physician practices. All of this was cited as an important contributing factor to the increase in physician burnout.

Another major problem is that the president’s blind ambition seems to have no connection to the current realities of payment and delivery reform in health care. According to another recent RAND report, we still know very little about how best to design and implement value-based payment programs to achieve stated goals and what constitutes a successful program.

Furthermore, the quality measures used to assess physician performance often have no relevance to the actual patient care that is being provided. Even accountable care organizations, the poster-child of alternative payment models, are off to a rocky start. According to early Centers for Medicare & Medicaid Services results, less than half (54) of the initial 114 organizations that participated in accountable care organizations achieved savings and of those, just 29 saved enough money to receive “shared savings” bonuses. In addition, the 29 participating pioneer accountable care organizations (more experienced organizations) showed that only nine achieved significant savings.

This is not to say that we shouldn’t pursue better ways of delivering and paying for health care. But, before linking an ever increasing amount of health care payment to value, we need to have a clear idea of what that means.