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Published: February 26, 2015

2015 - The year that all healthcare stakeholders are compensated on delivering patient value


The healthcare headline I’d most like to see

This is the one big healthcare headline I would like to see make the news this year.    And I can think of no better way to align all healthcare stakeholders than to eliminate once and for all the widely despised, unenforceable, underfunded Medicare Sustainable Growth Rate approach or SGR.

SGR is a method used by CMS to ensure that the annual increase in fees paid to healthcare providers working with Medicare patients doesn’t exceed GDP growth. In short, if total provider fees in a given year exceed the Medicare Payment Advisory Commission’s calculated target fees, a conversion factor is applied to the next year’s reimbursement payments that will force fit provider fees and total provider payments to the pre-determined SGR curve.

The next physician fee schedule is slated to be updated March 1, and if no Congressional action is taken, doctors will face a 21.2% cut in payments for care provided to Medicare beneficiaries.  A cut of this magnitude is guaranteed to drive Medicare providers to the private sector.  The mere threat of a cut this size is enough for providers to delay investment in equipment, facilities and staff, all of which will be in increased demand as the overall U.S. population continues to age.

Will Congress take bold steps this year?

If history is any indicator, the financial and political gamesmanship known as the “doc fix” will once again come in to play in 2015.  For the last 17 straight years, Congress has suspended or adjusted the physician Medicare fee schedule.   The problem with the continued application of the doc fix, an annual accounting patch used to avoid tough political decisions, is addressing the astronomical cost of repeal.  The most recent cost estimates of repeal, a sum which has grown, thanks to the resulting compounding effect of years of Congressional inaction: $140 billion.

The biggest loser in this discussion is the patient.  With absolute attention on cost, reform that would drive improved patient outcomes, greater patient healthcare value and yes, lower cost gets lost.  Overall patient care and, in fact, the future ability of Medicare patients to obtain care, is trumped by solo emphasis, focus and debate on the cost variable.

How to pay for SGR repeal

So what if instead continuing to work within the fee-for-service model, value-based payment forms were matched with value-based redesigns of healthcare services?  This paradigm shift could finance an SGR fix.  More importantly, it would redefine all healthcare stakeholder priorities as the facilitation and delivery of improved patient outcomes.  The clear winner in this scenario is the patient.

Read more about my proposed solution and get the perspectives of Barbara McAneny, MD, AMA Board of Trustees and Senator Joseph Lieberman, CEO Center for Healthcare Quality and Payment Reform in this recent HealthLeaders Media article or give us a call today at 866-437-8040, x253.

Patrick Dunham

Patrick Dunham has served as Curant Health’s chairman, chief executive and president since co-founding the company in May of 2000. Under Patrick’s leadership, Curant Health has created an integrated care delivery model providing true patient medication management. His vast knowledge of healthcare information technology led to the creation of MedPlan™,

a highly effective electronic medical record keeping system at Curant Health. On LinkedIn

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