“Given the scale of the problems that we face, we need to be trying lots of different things and recalibrating all the time,” he said.
Asked by senators what to focus on first, Dr. Wilson responded, “It would be nice if we had the luxury of just having one thing on our plate and one magic bullet, but we don't.”
MedPAC Offers Two Paths: One With Expenditure Targets, One Without
In testimony to the health subcommittee of the House Ways and Means Committee, Mr. Hackbarth explained that the MedPAC commissioners struggled with their task of choosing an alternative to the current sustainable growth rate (SGR) system. He reported that there were many tough debates, and that commissioners couldn't agree on just one solution. So instead they offered two proposals—ones they've deemed “Path 1” and “Path 2.”
Path 1 calls for repealing SGR and eliminating the system of expenditure targets. The MedPAC report suggests that Congress should implement new ways to improve incentives for physicians and other providers to offer quality care to their patients at lower costs. This could be done in the following ways:
▸ Giving the Centers for Medicaid and Medicare Services the authority to pay providers differently based on performance measures;
▸ Ensuring accurate prices by identifying and correcting mispriced services;
▸ Encouraging coordination of care and use of care management, especially for patients with chronic conditions.
Path 1 also calls for collecting information on physicians' practice styles and sharing the results with other physicians across the country. The commission proposes that Medicare could then use the results to adjust payments to physicians and base rewards on both quality and efficiency.
Path 2 calls for pursuing the approaches in Path 1 but also including a new system of geographically adjusted expenditure targets. The MedPAC report states that expenditure targets are necessary because they put “financial pressure on providers to change.” Path 2, however, does goes on to propose that expenditure targets should not fall solely on physicians but rather be applied to all providers in an effort to encourage different providers to work together at keeping costs as low as possible.