Medical Device Daily Washington Editor

WASHINGTON — The Medicare Payment Advisory Commission (MedPAC) met again last week to do further work on the report it is mandated to present to Congress regarding Part B physician payments, and a number of ideas received some refinement.

Other issues popped up as well, among them the sustainable growth rate system (SGR) of physician reimbursement. SGR has few advocates, but the panel was not yet prepared to scrap SGR since any successor system will likely take a number of years to implement.

Additionally, the aversion to primary care among freshly-minted MDs continues, andMedicare could find itself hip deep in another major problem as Baby Boomers slide into old age.

Dana Kelley, a staff member at MedPAC, reviewed some of the proposals, outlining the dilemma under the current payment system which reimburses doctors with no functional regard for quality of care.

“Medicare often pays more for poor care that results in unnecessary complications,” Kelley said.

One of the ideas she developed was to boost the use of primary care, partly in an effort to coordinate care and cut out redundant services, but also to head off health problems before they balloon into something expensive. However, she said that as matters stand, “there are few incentives for preventive services” and coordination of care for primary care physicians who operate solo practices is still a distant objective.

Group physician care was also on the agenda, an idea that may offer some help because “multi-specialty group practices offer the potential for better care coordination and efficient use of resources.”

This would include service to be provided by allied healthcare providers other than MDs. Kelley stated that the Centers for Medicare & Medicaid Services might do well to look into whether this might be an effective means of coordinating care.

Glenn Hackbarth, MedPAC chairman, said, “I think there is agreement in the commission that improving the efficiency and quality of the services provided to Medicare beneficiaries is not as simple as tuning up the SGR mechanism.”

Commission member Nicholas Wolter, MD, of the Billings Clinic (Billings, Montana) seconded Hackbarth’s sentiment, noting that “MedPAC is on record as saying that the SGR has not served its original purpose and that we should move away from it.”

“Volume control . . . as a program goal is not limited to Part B,” which “may make physicians feel better about the conversation,” Wolter said, adding that this is important because physician involvement will be necessary to exercise cost control over Medicare. He added that efforts to coordinate and integrate care might make a difference in reining in costs, but that an undue focus on individual payment silos risks failure in the overall Medicare resource management effort.

“I keep thinking about some of the Dartmouth work on how the growth in capacity drives increased volume and increased utilization,” Wolter said, but he insisted that despite problems with physician self-referral and the impulse of doctors to obtain scanning equipment in each practice, doctors are not the only problem.

Part of the blame, he said lies at the feet of hospitals with “tremendous strategies built around expansion and growth, and they hire physicians with the explicit goal that volumes will increase.”

Another commission member, Ronald Castellanos, MD, of Southwest Florida Urological Associates (Ft. Myers, Florida) argued that the focus on Part B physician payment was out of kilter, saying that he didn’t “understand the equity” behind a system that offers other providers “a percentage increase [based on] cost of living” while “45% of the doctors are going to take more cuts.”

He advocated a “move away from SGR” because “the volume control isn’t there — there’s no incentive for the physician” to control volume.

Castellanos observed that patient behavior may also feed the increase in Medicare services, offering the example that patients are conservative about prescription drug use because of copays, but that when it comes to diagnostic procedures, the mentality is that "I have a right because I have insurance." He urged more cost sharing by beneficiaries in this area.

Bob Reischauer, PhD, the vice chairman of MedPAC, described SGR as a “sledgehammer that isn’t working” and that the alternatives being considered by the commission may have some modest impact on quality and efficiency. However, he said that “as a society we have decided that we’re very reluctant to directly affect quantity or volume, which is called rationing.”

“It isn’t so simple to just throw out the SGR and replace it with something else,”Reischauer noted, given that many of the proposals to trim costs may indeed work, but the required structural changes would only affect costs “over the long haul.”

An issue well outside MedPAC’s domain but potentially having a rather large impact on Medicare is the availability of primary care physicians.

John Bertko of Humana (Louisville) said the problem “is a very long-care change” and that anything that boosts the numbers of primary care physicians (PCPs) “is perhaps a five-, seven-, 10-year mechanism.”

Nancy Kane of the Harvard School of Public Health (Boston) said she was of the same opinion about the outlook for PCPs. She said that in discussions with medical school students at Harvard that their choices of specialty typically run toward anesthesiology and other fields, but that when she asks them about primary care, the response is often that “we get told from day one [to] stay away from that.”

Kane said that many medical schools have “an anti-primary care culture and she suggested: “We need to think about how to offset that.”