Doctors have resisted the House version of the public option because it has been tied to Medicare rates, which have underpaid them compared to other payers. This was made worse when the proposed permanent "doctor fix" was voted down in the Senate.
Now, Tim Walz (DFL-MN) and and Rep. Ron Kind (D-WI) have achieved in what they call a "monumental breakthrough."
Adopted yesterday and incorporated into the House bill are adjustments to the formula by which hospitals and doctors would be paid under the Public Option to include value (quality/cost) rather than soley on the traditional Medicare "fee-for-service" basis. Walz represents Minnesota's First Congressional District which is home to the Mayo Clinic. Ron Kind represents the Third Congressional District of Wisconsin across the Mississippi in Wisconsin.
Many doctors have long resisted a public option based on current Medicare reimbursement methods and rates. The failure to pass a permanent solution to this problem or "doctor fix" earlier this week (with only 47 Democrats voting in favor) threatened to open the Pandora's box of having to address the lingering Medicare payment problem in the health care legislation.
Mayo Clinic has stated that its support for a public option would depend on the specifics but it too has voiced opposition to a "Medicare-like" public option (such as defined in the previous version of the House bill). However it is open to the Walz/Kind language, which was incorporated into the House bill yesterday.
The provision marries the Public Option with pay-for-value reimbursement. Similar language was included in the Baucus bill as the Cantwell "pay-for-value" amendment. Until now, the House has tended to favor a Medicare-rate based approach for the public option. [In fact, another daily kos post indicates that these matters are being discussed now. I am going by press reports, linked to this diary.]
The Walz/Kind provision addresses several needs: 1) a public option that competes with private insurance, 2) the problem with Medicare rates, and 3) the need to reduce costs responsibly by paying for value or results rather than for quantity of services alone. Yesterday, in a conference call with reporters, Walz and Kind declared the adoption of the provision as "breakthrough."
From the Rochester Post-Bulletin (October 22, 2009):
Breaking News: Mayo Clinic’s push to change how the government pays for health care scored a major victory today on Capitol Hill. The final version of the House health reform bill that will head to the floor for a vote will include language that would change how providers are paid — with a goal of rewarding quality instead of quantity. Calling it "an incredibly proud day," 1st District Rep. Tim Walz said this is the kind of health care reform that is needed.
Mayo has also pushed for earlier adoption of the pay-for-value language in the Baucus bill. It supports the insurance exchange, especially if it is "FEHBP-like," that is if it resembles the Federal Employees Health Benefits Plan.
Paying for value would tend to help blue states, which deliver higher quality care for lower cost (even when adjusted for inflation, as in the Northeast) and would create pressure for red states, like Texas, Louisiana, Arizona and Oklahoma, which tend to provide lower quality care at higher cost to Medicare, to change to more value-oriented delivery. See this new article by Maggie Mahar "Why is Health Care So Expensive in Rural Louisiana?" which highlights how arbitrary regional differences are.
These regional differences are best depicted in the report released last week by the Commonwealth Fund, Aiming Higher: Results from a State Scorecard on Health System Performance, 2009," and in the Dartmouth Atlas which provides comparative regional information on Medicare costs, utilization (rates of procedures adjusted to patient severity level) and outcomes.
In a study released with its 2008 data, the Dartmouth Institute for Quality and the Robert Wood Johnson Foundation reported on the potential impact of focusing on value-based care delivery:
Total spending for the population in this study was $289 billion over the five years. If the spending per patient everywhere mirrored that in Mayo’s home region ofRochester, Minn., Medicare could have saved $50.1 billion, or 17.3 percent of all spending on these patients alone.
Note: The patients in this Dartmouth study were Medicare patients with one or more chronic conditions. This patient group is considered among the most challenging to manage successfully, not to mention cost-effectively. Conditions included cancer, heart disease and/or respiratory disorders.