I spoke with the New York Times "Prescriptions" blog contributor Anne Underwood this week about physician payment reform. Here's an excerpt, but visit the NYT's blog for the full interview:

Q. What’s wrong with the way physicians’ pay is structured now?
A. We have built our system on a payment model that rewards volume. Doctors get rewarded for more tests, more volume, more hospital admissions, more visits. There are no incentives for quality of care or administrative efficiency. That’s part of why our system is more expensive than other nations.

The good news — and the reason why I’m excited about health care reform — is that the best health care in this country often tends to be very affordable. The whole discussion about bending the cost curve can be resolved by setting new incentives in payment that reward better outcomes with evidence-based medicine.

Q. The Cleveland Clinic and Mayo Clinic pay doctors a salary rather than fee-for-service. Is that what you mean?

A. At the Mayo Clinic, Cleveland Clinic, Kaiser Permanente and other integrated systems, doctors are salaried to improve quality. They’re unfettered from having to deal with the dizzyingly complicated current payment systems. And they can do it precisely because they have an integrated system.

But about 85 percent of the U.S. health care system is not integrated. Instead, it’s divided between small practices and community hospitals that aren’t linked together with incentives to coordinate care. In the hand-offs that occur between hospital care and outpatient treatment, patients sort of get lost in the shuffle. That’s one reason why 27 percent of patients with heart failure are back in the hospital one month later. They often don’t have the medications right or in hand, or they don’t understand what they need to do to help take care of themselves.

Even between the internist or family physician who generally manages a heart patient and the cardiologist who occasionally consults on the patient, you don’t have the coordination that should occur — unless you’re in one of those integrated systems, with electronic health records and incentives for coordination and quality.

ACC Senior Vice President of Science and Quality Janet Wright, M.D., F.A.C.C., and I were invited to attend a special meeting sponsored by NQF (National Quality Forum) on “enhancing physician performance.” The forum, which included ABIM (American Board of Internal Medicine) and the sister boards of family practice, surgery, pediatrics, internal medicine, ophthalmology, consumer groups, insurers, and business and consumer leaders, focused on primary care, prevention, new forms of payment, quality measurement, patient engagement, comparative effectiveness research and workforce issues. Key themes that came out of forum were the need for a quality-centered environment, patient-centeredness, a resurgence of professionalism and the need to reduce waste and ineffectiveness.

That all sounds familiar. But, the meeting was a refreshing conversation about how to actually improve performance. MOC is one way -- and that’s what this meeting was mainly about. But, ACC believes that registries (NCDR and IC3) could create an MOC environment where doctors demonstrate on a continuous basis quality competence and more desirable outcomes.

*** Image from Flickr (a.drian). ***

A new study from Avalere paints a gloomy picture for health information technology (IT) incentives included in the stimulus package. Many physicians, particularly those in small practices of one to three practitioners, will face significant upfront implementation costs for health IT ($124,000 over five years, with only $44,000 in incentives coming in).  Many may perceive themselves better off financially by paying a penalty for non-compliance.

We must reach out to these docs to communicate the bigger picture: reduced costs and gained efficiencies—not to mention higher quality care for our patients. Getting engaged in health IT will provide the best chance of keeping smaller practices viable in the coming era of payment reform.

*** Image from Flickr (aranarth). ***

ACC Vice President Ralph Brindis, M.D., F.A.C.C., kicked off this morning’s first session on defining quality and value at the 2009 Health System Reform Summit. The speakers – Douglas Wood, M.D., F.A.C.C., of Mayo Clinic, Glenn Steele, president and CEO of Geisinger Health System, and Francois de Brantes, CEO of Bridges to Excellence – all agreed that we need to seek value, and by pursuing quality we will get toward the ability to reduce costs. This is the opposite of the discussions in the political world – where the #1 priority is reducing costs, followed by quality.

Wood and de Brantes agreed that value is the best combination of quality and price. Wood argued for a formula for value, where: 

VALUE = QUALITY (Outcomes, Safety and Service)
            -------------------------------------------------------
            COST (Unit price X Use rate) 

By assigning numbers to these positions, you can determine the value of any given procedure, he said. This system has the potential to be implemented right away, and could be improved over time, according to Wood. Wood also made the point that quality should be the first focus of reform, and by improving quality, costs will be reduced over time.  

Steele talked about his Geisinger's efforts to improve care and reduce costs through chronic disease care optimization and acute episodic care; patient engagement; transitions of care; and the advanced medical home. For example, through its advanced medical home program (ProvenHealth Navigator), which uses partnerships between physicians (albeit mostly in larger practices and with health IT) and hospitals, Geisinger decreased medical costs by 4 percent and dropped readmission rates by 5 percent. Readmission rates for heart failure dropped by 40 percent. 

The bottom line: Efforts like this need to continue so we can brainstorm better ways of providing care. Value in care is not discussed nearly enough. If we are going to reform the health care system, the combination of quality and price MUST be part of the discussion, if not the whole discussion. The ACC knows that – increasing patient value is the #1 principle of ACC’s health care reform campaign and the #1 purpose of the application of registries, in particular the IC3 quality efforts  ... and the value principle was crafted LAST year at the 2008 Health System Reform Summit. Let’s hope value in care moves to the forefront in future discussions on reform. 

Today is the first day of the College’s 2009 Health System Reform Summit. Over 100 leaders from within the College have gathered to talk health care reform, brainstorm solutions, and find ways to get our voice heard. Over lunch, economist Len Nichols, Ph.D., director of the health policy program at the New America Foundation, gave a presentation titled, “The Cost of Health Reform (and of Doing Nothing).” Nichols made some great points right on target with the points the ACC has been trying to make with its Quality First campaign.

Nichols gave these as the underlying realities of the health care system:

• The system’s incentive structure is “deeply flawed” – and some profit from the flawed structure
• Behavioral choices affect health and health costs
• The system cannot afford “business as usual” trajectories
• Change is impossible but necessary (he intended you to smile here)

The incentive structure is deeply flawed. I’ve been talking about payment reform on this blog since it launched – since I started as CEO at ACC -- and I can assure you, it’s the top thing on the minds of our members. Physicians are NOT compensated for providing the right care the first time -- they are compensated for the VOLUME and COMPLEXITY of tests they perform. This has to change. Changing the payment structure to reward high performance could have a dramatic impact on controlling costs and improving care.

Payment reform was one of three investments Nichols said we could use to create efficiencies to pay for reform. The remaining two: health IT and comparative effectiveness research. The ACC is highly supportive of health IT. We think it can improve efficiencies and reduce medical errors. Cardiology has one of the higher rates of health IT adoption of any of the specialties, but it’s not nearly high enough. We need to use the stimulus dollars to implement INTEROPERABLE health IT. Because we need to use it to adhere to guidelines, outcomes effectiveness and value. Comparative effectiveness is a little trickier – it must be done right to truly work.

Here’s what he says are solutions to “breaking the chain” of inaction: pursue bi-partisan reform and reform ourselves. Cardiologists can do this. We already are – look at our registries (National Cardiovascular Data Registry and its many sub-registries); look at our guidelines, appropriate use criteria, performance measures and other clinical documents, helping CV professionals translate science into everyday practice. We need other specialties to follow, and we need Congress and the President to listen.

The new issue of Health Affairs reports on a new analysis that offers conclusive evidence of what most of us already suspected: Chronic care management programs reduce hospital readmissions and shorten hospital stays for participants. The study reexamined data from 10 clinical trials of heart failure care management programs between 1990 and 2004. Patients in programs that adopted a multidisciplinary team approach and used in-person communication had 3 percent fewer hospital readmissions than patients undergoing routine care. They also had 6 percent fewer readmission days. 

My God, this is unexpected?!

The ACC held its seventh annual Medical Directors’ Institute (MDI) last week. This year's meeting was the largest ever, with 100 participants, including ACC leaders, health plan representatives, and other stakeholders.

Our primary focus was the current hot topic of “efficiency,” and the lack of a standardized definition about what it is among payers, physicians, policymakers and patients. In an effort to address this issue, MDI participants heard from CMS and public (AHRQ), private (NQF), for-profit (WellPoint) and non-profit (PHRI) stakeholders about their strategies, initiatives and challenges in the health care efficiency arena. Participants had the opportunity to identify areas of convergence and opportunities for alignment, while also providing concrete ways for cardiology to influence and improve efficiency in collaboration with key stakeholders. It was a spirited set of discussions.

The ACC continues to be recognized by health plans for being ahead of the curve in the health care arena when it comes to quality. Our NCDR registries and Appropriate Use Criteria (AUC) continue to get great reviews, while the ACC's new IC3 outpatient registry program and our Cardiovascular Recognition Program (CVRP) are seen as having lots of partnership potential with insurers. What’s missing is major collaboration between insurers and doctors on these kinds of efforts. Everyone seems to have a plan for reforming the health care system. The MDI and other events put us one step closer to developing a plan that works for us all.