Medicare Authority Can Drive Improvements In Medical Delivery System

Ask the experts and they are likely to tell you that the Medicare provider payment system needs a major overhaul to eliminate wasteful spending and to facilitate more efficient and better care coordination. In fact a Medicare Payment Advisory Commission report recommended just this in August 2009.

Now in a March 2010 commentary published in the New England Journal of Medicine, two leading Brandeis university health policy analysts wrote that a proposal to provide the Centers for Medicare and Medicaid Services (CMS) new authority to implement alternative payment structures could stimulate major delivery system innovation.

Comprehensive Reform of Medicare's Provider-Payment System

"Medicare, and health care reform in general, needs to be a priority if we are going to insure that older Americans get the medical services they need at an affordable price," noted Alan Weinstock, insurance broker. "Just look at the recent findings about the number of premature deaths due to lack of health insurance."

The report, "Lives on the Line: The Deadly Consequences of Delaying Health Reform," indicated a link between a lack of health coverage and premature death occurs because the uninsured don't have a regular source of health care or access to preventive care and, therefore, delay or forgo needed medical attention. Reform of Medicare's provider-payment system is a major step in fixing the system.

According to the commentary, through a voluntary program a newly created Center for Medicare and Medicaid Innovation (CMI) would have "authority to implement innovative payment system pilots and expand those that are shown to reduce Medicare expenditures and improve quality." Health care organizations that are motivated to reduce excess clinical spending but have been reluctant to do so under the current fee-for-service reimbursement program due to the financial implications would realize the most benefit. In their commentary the authors also detailed changes the CMI could recommend to improve health care delivery and slow spending growth.

Medicare Beneficiaries Reap the Benefits

While Medicare in general has been successful in ensuring that Medicare beneficiaries have access to affordable health care, often the sickest and poorest members face financial burdens that threaten this access. Rapid growth in Medicare spending, meanwhile, has prompted the government to cut payments to providers. Finding a way to improve the provider-payment system in order to protect access to care means identifying a payment system that reduces Medicare expenditures while it rewards quality service.