CardioExchange Archive

CardioExchange, an NEJM practice community for medical professionals dedicated to improving cardiac patient care, was active from 2009 to 2015. CardioExchange fostered discussion between clinicians from across the globe.

December 24th, 2013

The SGR Fix: Cost Versus Quality

The physician community might want to pay attention to what is going on with the sustainable growth rate (SGR).

Congress is finally on the verge of abolishing the SGR and, in an odd twist, it may not call for a joyous celebration. The crux of the disagreement centers on proposals in the House and Senate which would replace the SGR with pay-for-performance programs linking physician payments to quality. The most controversial aspect of these proposals lies in the Senate’s SGR Repeal and Medicare Beneficiary Access Improvement Act of 2013. Specifically, the plan would introduce a Value-Based Performance Incentive Program (VBP) starting in 2017 for fee-for-service (FFS) providers. The VBP would consolidate the Physician Quality Reporting System, Value-Based Modifier, and EHR Meaningful Use Program into a weighted, composite score. It would also include a new measure of physician engagement in “clinical practice improvement activities” [PDF].

However, what makes the VBP especially provocative is that it depends on a budget-neutral payment pool. In other words, there will be clear “winners” and “losers” with penalties for poor performers used to increase payments for high performers. While I laud Congress for seriously attempting to repeal the SGR, ensuring that the new proposal remains budget neutral seems unfair. If the real purpose of this program is to advance the quality of care, then providers should not be penalized for improving at slower rates than their peers. Even if every single provider in the country upgraded the quality of care they deliver, many would still be penalized.

The use of VBP as a carrot and stick is magnified by the fact that it will not apply to providers participating in “alternative payment models” (APMs). Clearly, Congress is encouraging providers to shift away from FFS by allowing them to eschew the potential penalties inherent in VBP. This should come as no surprise since the number of APMs has dramatically expanded with the enactment of the Affordable Care Act; an increasing number of providers are participating in accountable care organizations, bundled payment programs, and other pilot projects. Unlike the budget-neutral aspect of the VBP, I fully support Congress’ desire to transition away from the outdated FFS model. APMs, like the one employed by the California Public Employees’ Retirement System, have shown that they can drastically reduce the costs of care while maintaining or improving quality.

While I cheer on Congress’ attempt to repeal the SGR and transition the health system towards one that rewards providers based on quality and not quantity, I fear that they may be more concerned with curbing rising health care costs than improving quality. Akin to their approach in the Hospital Readmissions Reduction Program (HRRP), a large number of providers will be penalized despite improving performance. Instead of creating a budget-neutral payment policy, Congress should enact benchmarks for improvement so that providers have achievable targets to aim for. MedPAC has called for similar reforms and this would still allow Congress to recoup payment from providers who fail to reach the preset benchmarks [PDF].

I am interested in hearing what the CardioExchange community thinks.

 

Categories: General
Tags: , , ,


You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

One Response to “The SGR Fix: Cost Versus Quality”

  1. William L Blanchet, MD says:
    December 27, 2013 at 9:59 am

    I like the Idea. I fear the Implementation.

    Of course, we should encourage quality, cost effective healthcare. We should reward those who practice it and punish those who don’t. However the goal of defining cost effective quality care is a science still in its infancy. Some factors can be measured, the majority can’t even be seen much less measured.

    A few examples. Let’s begin with the common scenario:

    An elderly diabetic with end stage hip arthritis presents with his daughter in a wheelchair. His prior doctor (from a different city) concluded that he was not a surgical candidate and that he just needed to stay in the wheelchair and deal with his problem. I evaluated the patient and determined that he was a reasonable surgical candidate. He had the hip surgery, had an unremarkable recovery, and lived for many years in decreased pain and was able to ambulate.

    So, which physician would be rewarded for performance; the one who prevented the surgery and saved the system money or the one who allowed surgery and improved the quality of the subject’s life?

    Physicians get reputations as to what patients they care for better than other physicians. Some physicians do very well with patients who suffer from personality disorders or poorly defined mental illness. As a consequence, they tend to have a disproportionate number of these high acuity subjects. These folks tend to take more time, use more resources, and have worse outcomes, however the personality disorders are often not characterized in the medical record because if the patient gets a list of diagnoses that includes “borderline personality” or “probable undiagnosed bipolar disorder”, they will become enraged and leave the practice. Can the system really correct for this patient self selection. Life is not a randomized study.

    The list of unmeasurable circumstances in infinite, I could give examples all day.

    Finally, will we be judging the physicians’ performances on quality of care or will it be more on quantity of diagnoses. If you compare current costs with historical costs, we will be rewarding those with a history of sloppy care while punishing those with a history of quality care?

    A Federal policy of VBP has more perils than merritt. VBP can be administered at a small local level as seen with the California project as noted above, or an even better example is Rocky Mountain HMO in Grand Junction Colorado, however to entrust the Federal government to correctly administer this is naive. It will open more portals for abuse than value.