Doctors Don't Agree on How to Reform Medicare Payment

Physicians are dissatisfied with the current Medicare reimbursement system and want reform, yet they disagree on what type of reform they would be willing to accept.

“Most physicians believe that Medicare reimbursements are inequitable, and yet there is little consensus among them regarding major proposals to reform reimbursement,” Dr. Alex D. Federman and his colleagues from Mount Sinai School of Medicine, New York, said regarding their national survey of physicians' opinions on reform, published in the Archives of Internal Medicine.

“Overall, physicians seem to be opposed to reforms that risk lowering their incomes. Thus, finding common ground among different specialties to reform physician reimbursement, reduce health care spending, and improve health care quality will be difficult,” the investigators noted.

The investigators surveyed physicians between June and October 2009 – at the height of the congressional debate on health reform. Of 2,518 physicians who received a version of the survey addressing reimbursement reform, 1,222 (49%) responded.

A total of 78% of respondents agreed that under Medicare some procedures are compensated too highly while others aren't compensated enough to cover costs, according to the survey results. However, when asked about specific methods to reform Medicare payment, the physicians surveyed showed little agreement.

More than two-thirds of physicians said they opposed bundled payments, with surgeons – who have the most experience with bundling – expressing the lowest levels of support for this strategy (Arch. Intern. Med. 2010;170:1735-42).

“Because bundled payments are likely to be implemented in one form or another, this mechanism ought to be carefully explained to physicians to promote broad acceptance and smooth implementation,” Dr. Federman and colleagues wrote.

Half of the responding physicians said they supported financial incentives to improve quality, and “support for incentives was more common and more consistent across all specialties compared with shifting and bundling payments,” the investigators wrote. “Actual experience with financial incentives to improve quality could have directly informed physicians' generally more positive views of these types of reimbursement mechanisms.”

Physicians disagreed on whether to shift some portion of payments from procedures to management and counseling, with those who conduct procedures saying they were against it and those who do more management and counseling coming out in favor of it, the study said.

Still, about 17% of surgeons and 27% of physicians in other more procedurally oriented specialties said they supported such a shift, “indicating that underpayment of management and counseling even in procedurally oriented specialties is a concern for many physicians.”

The investigators reported no relevant conflicts of interest.

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Failure Could Lead to Cuts in All Fees

“Despite physician concerns about payment reform, failure to change payment systems may be worse for providers,” Michael E. Chernew, Ph.D., wrote in an accompanying commentary. “If we retain the current fee-for-service system, there will likely be significant downward pressure on payment rates for all providers … hoping that payment reform (or fee cuts) will not materialize seems overly optimistic.”

It's likely that any payment reform will have significant effects on the basic business model of many physician practices, but providers can find ways to save costs within most of the reforms by reducing redundant and unnecessary care, according to Dr. Chernew (Arch. Intern. Med. 2010;170:1742-4).

“Payment reform will surely generate some provider backlash, and surely bundled payments will create tension between physicians and other types of providers, among different specialties, and between primary care and specialist physicians,” he wrote. “Moreover, the transition to new payment systems may not be easy, requiring considerable investment and organizational change.”

But failing to act could lead to worse consequences for physicians, he wrote.

MICHAEL E. CHERNEW, PH.D., is a professor of health care policy at Harvard Medical School. He reported no relevant financial conflicts of interest.

Physicians are dissatisfied with the current Medicare reimbursement system and want reform, yet they disagree on what type of reform they would be willing to accept.

“Most physicians believe that Medicare reimbursements are inequitable, and yet there is little consensus among them regarding major proposals to reform reimbursement,” Dr. Alex D. Federman and his colleagues from Mount Sinai School of Medicine, New York, said regarding their national survey of physicians' opinions on reform, published in the Archives of Internal Medicine.

“Overall, physicians seem to be opposed to reforms that risk lowering their incomes. Thus, finding common ground among different specialties to reform physician reimbursement, reduce health care spending, and improve health care quality will be difficult,” the investigators noted.

The investigators surveyed physicians between June and October 2009 – at the height of the congressional debate on health reform. Of 2,518 physicians who received a version of the survey addressing reimbursement reform, 1,222 (49%) responded.

A total of 78% of respondents agreed that under Medicare some procedures are compensated too highly while others aren't compensated enough to cover costs, according to the survey results. However, when asked about specific methods to reform Medicare payment, the physicians surveyed showed little agreement.

More than two-thirds of physicians said they opposed bundled payments, with surgeons – who have the most experience with bundling – expressing the lowest levels of support for this strategy (Arch. Intern. Med. 2010;170:1735-42).

“Because bundled payments are likely to be implemented in one form or another, this mechanism ought to be carefully explained to physicians to promote broad acceptance and smooth implementation,” Dr. Federman and colleagues wrote.

Half of the responding physicians said they supported financial incentives to improve quality, and “support for incentives was more common and more consistent across all specialties compared with shifting and bundling payments,” the investigators wrote. “Actual experience with financial incentives to improve quality could have directly informed physicians' generally more positive views of these types of reimbursement mechanisms.”

Physicians disagreed on whether to shift some portion of payments from procedures to management and counseling, with those who conduct procedures saying they were against it and those who do more management and counseling coming out in favor of it, the study said.

Still, about 17% of surgeons and 27% of physicians in other more procedurally oriented specialties said they supported such a shift, “indicating that underpayment of management and counseling even in procedurally oriented specialties is a concern for many physicians.”

The investigators reported no relevant conflicts of interest.

View on the News

Failure Could Lead to Cuts in All Fees

“Despite physician concerns about payment reform, failure to change payment systems may be worse for providers,” Michael E. Chernew, Ph.D., wrote in an accompanying commentary. “If we retain the current fee-for-service system, there will likely be significant downward pressure on payment rates for all providers … hoping that payment reform (or fee cuts) will not materialize seems overly optimistic.”

It's likely that any payment reform will have significant effects on the basic business model of many physician practices, but providers can find ways to save costs within most of the reforms by reducing redundant and unnecessary care, according to Dr. Chernew (Arch. Intern. Med. 2010;170:1742-4).

“Payment reform will surely generate some provider backlash, and surely bundled payments will create tension between physicians and other types of providers, among different specialties, and between primary care and specialist physicians,” he wrote. “Moreover, the transition to new payment systems may not be easy, requiring considerable investment and organizational change.”

But failing to act could lead to worse consequences for physicians, he wrote.

MICHAEL E. CHERNEW, PH.D., is a professor of health care policy at Harvard Medical School. He reported no relevant financial conflicts of interest.

Physicians are dissatisfied with the current Medicare reimbursement system and want reform, yet they disagree on what type of reform they would be willing to accept.

“Most physicians believe that Medicare reimbursements are inequitable, and yet there is little consensus among them regarding major proposals to reform reimbursement,” Dr. Alex D. Federman and his colleagues from Mount Sinai School of Medicine, New York, said regarding their national survey of physicians' opinions on reform, published in the Archives of Internal Medicine.

“Overall, physicians seem to be opposed to reforms that risk lowering their incomes. Thus, finding common ground among different specialties to reform physician reimbursement, reduce health care spending, and improve health care quality will be difficult,” the investigators noted.

The investigators surveyed physicians between June and October 2009 – at the height of the congressional debate on health reform. Of 2,518 physicians who received a version of the survey addressing reimbursement reform, 1,222 (49%) responded.

A total of 78% of respondents agreed that under Medicare some procedures are compensated too highly while others aren't compensated enough to cover costs, according to the survey results. However, when asked about specific methods to reform Medicare payment, the physicians surveyed showed little agreement.

More than two-thirds of physicians said they opposed bundled payments, with surgeons – who have the most experience with bundling – expressing the lowest levels of support for this strategy (Arch. Intern. Med. 2010;170:1735-42).

“Because bundled payments are likely to be implemented in one form or another, this mechanism ought to be carefully explained to physicians to promote broad acceptance and smooth implementation,” Dr. Federman and colleagues wrote.

Half of the responding physicians said they supported financial incentives to improve quality, and “support for incentives was more common and more consistent across all specialties compared with shifting and bundling payments,” the investigators wrote. “Actual experience with financial incentives to improve quality could have directly informed physicians' generally more positive views of these types of reimbursement mechanisms.”

Physicians disagreed on whether to shift some portion of payments from procedures to management and counseling, with those who conduct procedures saying they were against it and those who do more management and counseling coming out in favor of it, the study said.

Still, about 17% of surgeons and 27% of physicians in other more procedurally oriented specialties said they supported such a shift, “indicating that underpayment of management and counseling even in procedurally oriented specialties is a concern for many physicians.”

The investigators reported no relevant conflicts of interest.

View on the News

Failure Could Lead to Cuts in All Fees

“Despite physician concerns about payment reform, failure to change payment systems may be worse for providers,” Michael E. Chernew, Ph.D., wrote in an accompanying commentary. “If we retain the current fee-for-service system, there will likely be significant downward pressure on payment rates for all providers … hoping that payment reform (or fee cuts) will not materialize seems overly optimistic.”

It's likely that any payment reform will have significant effects on the basic business model of many physician practices, but providers can find ways to save costs within most of the reforms by reducing redundant and unnecessary care, according to Dr. Chernew (Arch. Intern. Med. 2010;170:1742-4).

“Payment reform will surely generate some provider backlash, and surely bundled payments will create tension between physicians and other types of providers, among different specialties, and between primary care and specialist physicians,” he wrote. “Moreover, the transition to new payment systems may not be easy, requiring considerable investment and organizational change.”

But failing to act could lead to worse consequences for physicians, he wrote.

MICHAEL E. CHERNEW, PH.D., is a professor of health care policy at Harvard Medical School. He reported no relevant financial conflicts of interest.