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.