A Call to End Fee for Service Health Care

A Call to end fee for service and developing lists of tests seniors should avoid.  Coming up.       O’ConnorReport assembles an Editorial Advisory Board and new medical procedure codes and health care costs.  

Call for Salaried Physicians and Purchasing Quality and Value 

Over eighty years ago, in October 1932, the Committee on the Costs of Medical Care made the dramatic and ultimately calamitous recommendation that fee for service health care should end and that physicians should be salaried.  The Committee believed the fee for service approach increased health care costs because of the duplications and redundancies throughout the system.  The negative reaction to this report was so intense that Roosevelt did not include health care in the New Deal and Social Security and other Progressive legislation., fearing it would defeat his legislative agenda.   This week the National Commission on Physician Payment Reform appointed by the Society of General Internal Medicine calls for the end of fee for service payment by the end of the decade.

The 1932 recommendations were shunned and the report buried.  In 1932, there was no health insurance and over 90% of all physicians were in independent private practice.   In 2012, 57% of physicians are employed by hospitals systems and medical groups, and 43% are in independent private practice and smaller groups.  http://www.physiciansfoundation.org/uploads/default/Physicians_Foundation_2012_Biennial_Survey.pdf

Physician payments were targeted by the Commission this year because while physician salary and expenses account for only 20% of health care costs, physicians  make or influence 60% of health care decisions.  CMS, the agency responsible for Medicare and Medicaid, is currently conducting pilot projects on using bundled payments for Medicare patients, much like the approach used in the last blog about the Cleveland Clinic.  Containing health care costs is important because of their impact on the economy.

“CBO’s (Congressional Budget Office) latest figures confirm what Republicans and Democrats acknowledge only selectively — that healthcare is a huge part of what’s driving federal spending and debt. Healthcare programs are eating up an ever-increasing share of the economy,  while tax revenues and other domestic spending are holding relatively steady,” CBO said. http://thehill.com/blogs/healthwatch/medicare/266955-cbo-federal-healthcare-costs-skyrocketing#ixzz2Mi9RhudD

The National Commission’s report noted with a sense of urgency that fee for service drives up health care costs and that payers should eliminate fee for service payments to medical practices by the end of the decade and test new models over the next five years.   It also suggests shifting to a system, much like the one cited in last week’s O’ConnorReport, by using new models based on quality and value.  The Commission thought new payment  systems would also address the current  inequities in physician compensation, especially in Medicare.


There will be a maelstrom about this issue.


Tests Seniors Should Avoid

The Choosing Wisely campaign started last spring in a partnership between the American Board of Internal Medicine Foundation and Consumer Reports. The campaign is an attempt to warn doctors and patients about problematic and commonly overused medical tests, procedures and treatments.

By working through organizations representing medical specialties, Choosing Wisely asked doctors to outline “Five Things Physicians and Patients Should Question.”

Choosing Wisely published recommendations from geriatricians and palliative care specialists 18 new lists released last week which may be of particular interest.

For more about the recommendations read:  http://newoldage.blogs.nytimes.com/2013/02/28/for-the-elderly-lists-of-tests-to-avoid/?src=recg

Kathleen O’Connor © March 6, 2013

About Kathleen

Kathleen O’Connor: 30+ year health care consumer advocate, non-profit executive and author. For more information about Kathleen, please see "About" on the main content bar above.
This entry was posted in consumer protection, Economy, Health Care Reform, health insurance, policy and politics and tagged , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *