Senators put focus back on payment reform

  • Article by: JILL BURCUM
  • Updated: September 17, 2009 - 5:46 PM

 What should have been front and center in health care reform — overhauling a fee-for-service payment system that rewards quantity not quality — slipped under the radar in this summer’s fracas over death panels and the public option.

Payment overhaul is one of the keys to controlling the skyrocketing costs of the nation’s $2.4 trillion annual health care tab, and there's new hope that this important issue will get the spotlight it deserves.  This week, Minnesota Sen. Amy Klobuchar gave a welcome speech on reforming the Medicare payment system. Click HERE to see Klobuchar’s speech.


On Thursday, 28 senators led by Klobuchar and Washington’s Maria Cantwell sent a letter to President Obama calling for payment reform. Note the bipartisan group of letter signers: 21 Democrats, 6 Republicans and one independent who caucuses with the Democrats. Here’s the text of the letter:


September 17, 2009

President Barack Obama

The White House


Dear Mr. President:

As you continue working with Congress to facilitate the passage of health care reform legislation, we write to emphasize the need to realign spending in the Medicare program to focus on providing more value to beneficiaries.  We support many of the Medicare payment reforms that are included in current versions of health care reform legislation, but believe additional effort must be made to get better care at a lower cost. 


In your September 9, 2009 address to Congress you correctly identified the need to improve Medicare’s efficiency in a way that will reduce costs and promote better quality throughout the health care industry.  We believe that a fundamental way to achieve this goal is to realign the Medicare payment system to reward health care providers for the quality of care they deliver, not simply the quantity of services they provide.


We represent states and regions that have demonstrated true leadership in lowering costs to Medicare while increasing the quality of care patients receive.  The "high efficiency" areas we represent are known for utilizing integrated health delivery systems and innovative quality measures to provide Medicare beneficiaries with better value.  Research shows that these efficient delivery practices can save the Medicare program upwards of $100 billion a year, while also providing beneficiaries better access to the care they need.


Unfortunately, as you know, the current Medicare payment structure penalizes those who provide efficient care, while rewarding those who order unnecessary tests and services.  To incentivize more efficient health care practices, Medicare needs to incorporate a payment system that factors in the quality of care provided relative to its cost.  This new payment methodology needs to reward providers who achieve good quality outcomes at a low cost.  Such a change is critical to reining in costs and improving patient outcomes.


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