The Obama administration has been
chipping away at the basic, fee-for-service structure of our healthcare system, experimenting with Medicare (the system that is under federal control) to find ways to emphasize quality of care and create savings by limiting unnecessary and unsuccessful procedures. They're now ready to take that experiment much wider, proposing to make the voluntary quality of care programs and make them mandatory,
reimbursing doctors and hospitals in a number of areas based on quality of care. But that likely won't come without a political fight.
It introduced two such programs this week. One would require all hospitals in 75 metropolitan areas to accept a flat fee for the costs associated with a hip or knee replacement—including the costs of surgery, medications, the joint implant and rehabilitation. And if the quality of the care is not judged to be good, Medicare will take back some of the money it paid. Another program would increase or decrease payments to home health agencies in nine states, depending on how they perform on certain quality measurements.
The Department of Health and Human Services always had the authority to change the amounts it paid for certain services, but before Obamacare, it needed Congress to pass legislation to change the way it paid for them. The agency is asking for public comment on the proposals.
These changes will allow the administration to reshape the Medicare program. The new payment rules, while guided by existing evidence, are still experimental—and are likely to anger Obamacare critics and members of Congress who would prefer to see major changes to Medicare enacted through legislation.
The administration
says that the proposal is likely to save $150 million over five years.
Conservative groups, like the American Enterprise Institute, are going to be hot to sue because that's just what they do. It's great for fundraising. But this is going to be a good test of how committed Republicans in Congress are to really fighting Obamacare, or if they're as sick of the fight as the rest of us. They already have one
lawsuit pending over "executive overreach" on Obamacare. Chances are they'll hold off on the outcome of that before deciding whether to jump in again.
Or they might take their anger out on President Obama's new nominee to head the Centers for Medicare and Medicaid Services, Andy Slavitt. Sen. Orrin Hatch (R-UT) has already threatened to make the nomination process as difficult as he can. So congressional Republicans' protest might be limited to the one thing that they have absolutely perfected—obstructing this nomination.