With the implementation over the next several years of the Medicare Access and CHIP Reauthorization Act (MACRA) and the gradual build-out of Physician Compare, a website launched by the Affordable Care Act (ACA), we are entering a new era of physician accountability.
MACRA replaced the unworkable sustainable growth rate (SGR) formula with a far-reaching quality measurement and payment system for physicians who treat Medicare patients. Beginning in 2019, physician payment will be much more tightly tied to quality and performance measures.
Combined with newly invigorated private-sector attention to the inefficiencies of physician payment, MACRA may trigger a “disruptive innovation” in health care. Namely, as a profession, in group practices large and small, and individually, physicians will be significantly incentivized—at long last—to address the failings that vex our health care system. As a reminder, these include:
- A 25 percent to 30 percent rate of unnecessary, inappropriate, or excessive care;
- All too common misdiagnosis and medical errors;
- Care whose “value”—results for the money paid—is suboptimal;
- High and escalating prices, the highest paid physicians in the world, and an unsustainable cost growth trend; and,
- The most expensive health care system in the world even as it yields poorer overall results compared to other developed nations that spend less.
Doctors clearly are not to blame for the totality of these failures. But since roughly the year 2000, consensus has grown that no gains can be made in tackling the above problems without changing the drivers of physician behavior. They are the main actors in the system; they deliver the care and order it. In doing so, they generate the majority of costs. Increasingly, they also run health care systems and hospitals.
Many avenues to changing physician behavior exist: regulation and oversight; education and training; professional standards and rewards; peer pressure and review; community standards; the threat of malpractice; performance/quality measurement; financial incentives; and competition, to name the most important.
All must be employed.
This post reflects on the last three of those avenues — performance/quality measurement, financial incentives, and competition.
Performance And Quality Measurement
Assessing physician performance as a way to drive quality improvement and consumer choice is coming under newly intense scrutiny. Measurement was supposed to become easier, better, and more meaningful with the spread of electronic health records (EHRs). That hasn’t happened. So the field remains largely dependent on direct reporting and claims data, which is imperfect.
At the same time, the number of measures has proliferated; it’s now well over a 1,000. And the application of these measures via Medicare, insurers, health systems, and payers has been chaotically executed. Some experts, such as Don Berwick, advocate a 50 percent reduction in the number of measures.
The upshot: Physicians and their staffs are now spending an unacceptable amount of time dealing with the reporting of quality measures — 15 hours per physician per week at a cost of just over $40,000 per doctor per year, according to a recent article by Lawrence Casalino and colleagues in the March 2016 issue of Health Affairs.
In the same issue of Health Affairs, Phillip Miller suggests that this time commitment and level of scrutiny has deepened physician dissatisfaction and burnout, with the majority of doctors in a 2014 survey expressing negative feelings about their profession and its future.
But despite physicians’ grumbling, new attempts to rate doctors are actually proliferating, as consumers’ interest in and engagement with this information grows. I wrote about this in an article in the April 2016 issue of Health Affairs: Millions of people are now rating their doctors online and media organizations, such as ProPublica, Consumer Reports, and Consumers Checkbook, are using Medicare data and other data to probe physicians’ quality of care, and issue consumer-friendly report cards. Here too, though, methodology and results have stirred up controversy.
Into this contentious environment comes MACRA. It mandates financial incentives starting at 4 percent of Medicare reimbursement, as bonus or penalty, in 2019 and rising to 9 percent in 2022 for physicians who choose to enroll in what the Centers for Medicare and Medicaid Services (CMS) has dubbed the Merit-based Incentive Payment System, or MIPS. (Get ready to hear that acronym a lot.)
Doctors in MIPS must report performance measures to CMS. They’ll then be graded on four factors: quality-of-care (30 percent); resource use (30 percent); meaningful use of EHRs (25 percent); and clinical practice improvement activities (15 percent). Quality-of-care metrics must include patient experience.
Alternatively, doctors can become part of an Alternative Payment System, or APM, such as an Accountable Care Organization (ACO).
Although the American Medical Association (AMA) and other physician organizations helped design and generally support the new payment scheme, they disagree with many of the proposed details. These were aired in a plethora of comments to CMS in late 2015 and are discussed in a Health Affairs’ Health Policy Brief on MACRA posted last week.
Among the questions regulators and providers will be wrestle with:
- How much risk should doctors take on in alternative payment models?
- How much latitude should physician groups have in designing the clinical practice improvement activities they’ll be graded on in MIPS? What will practice improvement even encompass?
- How much measurement will happen at the group practice level and how much at the individual physician level?
- Can “value” in health care really be pinned to a batch of scores on clinical quality, resource use, EHR use, and practice improvement?
- In striving to avoid incentivizing too much care, can the new system also avoid incentivizing too little care?
Consensus may or may not emerge on these and other issues during the next three years of MACRA rulemaking and implementation. Possibly complicating matters early next year will be the change in administrations and a new Congress.
Basing payment on performance is one way to change physician behavior. Another way is to foster competition based on those same measures of performance and quality. That happens at the insurance plan and payer level but it can also happen at the consumer level. Doctors are already vying for network inclusion, for example, and group practices are being scrutinized by everyone. Indeed, it’s likely that under MACRA virtually every physician will be profiled based on their quality of care, resource use, patient experience, use of data and technology, etc.
I argue in the April issue of Health Affairs that consumers will increasingly play a role in this competition. That will occur when we all have access to meaningful metrics to compare group practices and individual doctors, and when we can discern this complex information at consumer-friendly websites.
The Affordable Care Act promoted such public reporting, most prominently by mandating Physician Compare. That website has been slow to get up and running. CMS pledges major enhancements this year. Meaningfully, Physician Compare is already getting more traffic than Hospital Compare.
Physician Compare has its own competitors, too, which inures to consumers’ benefit. Media organizations, regional stakeholder collaboratives, and an increasing number of states are committed to physician report cards. Consumer Reports on March 29 released its latest physician ratings, in six states and two metro areas. ProPublica plans a second probe of surgeon outcomes this year.
Some final thoughts. First, physicians have a legitimate beef that the burden of measurement today is excessive. It’s time to overhaul a dysfunctional measurement scheme and strive, where we can, to let doctors focus on being doctors. But we cannot and should not retrench. For too long, the lack of physician accountability let our health system function at low levels of performance and poor value.
Second, there’s reason to be optimistic: The science of measurement is improving, as is the art of public reporting. And, by all accounts, CMS is committed to creating a much better payment incentive system under MACRA, and to making Physician Compare a meaningful site.
Third, financial incentives work. It’s that simple. By 2022 or so, the majority of doctors will either have 30 percent to 50 percent of their income tied to performance (with government plus private-sector payment initiatives) or be salaried in an integrated system. That’s the right direction.
Fourth, consumer choice in a robust marketplace must be part of the solution. It works in other areas of our economy; indeed, it’s the foundation of our economy. As consumers face rising premiums and higher out-of-pocket spending, they deserve no less than to be armed with clear comparative information on health plans, providers, treatment options, and costs.
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