Commentary: We can make the Medicare system better

When Minnesota seniors visit a doctor or go to the hospital, they get some of the best medical care in the country. Statistics show that doctors and hospitals treating Medicare patients in Minnesota are consistently above the national average — just as Garrison Keillor might have predicted.

In July, the U. S. Congress passed an important piece of legislation to make a temporary repair in Medicare’s payment system. It will avert a harmful cut in physician payments — a cut that would have driven doctors out of the system in Minnesota communities such as Fergus Falls, St. Cloud and Duluth and led to reduced dependability of care for seniors.

But this latest Medicare payment fix should be the last temporary fix that Congress makes. We need a permanent fix to what has become a broken payment system.

Comprehensive payment reform will allow Medicare to get the best value for the money it spends — and the new law lays the groundwork, in statute and in spirit, to accomplish this.

If we change Medicare to achieve genuine value from Medicare dollars spent, we can assure people on Medicare high quality, safe care that is focused on their needs. We can assure access for seniors while creating a stronger and improved Medicare program.

Created in 1965, Medicare provides health coverage to nearly 44 million Americans, including about 37 million people aged 65 and older and another 7 million adults with permanent disabilities. Medicare’s annual spending exceeds $400 billion and accounts for nearly one-seventh of the federal budget.

The problem is that, despite periodic efforts at reform, Medicare pays for quantity, not quality. The current system actually encourages service — whether needed or not. More tests and more surgeries mean more money for doctors — even if the extra tests and operations do nothing to improve a patient’s condition.

More money, lower results

The Congressional Budget Office, Congress’ nonpartisan budget research branch, recently studied Medicare’s finances and concluded: “The evidence does not indicate that higher Medicare spending is associated with better care for Medicare beneficiaries. In fact, it suggests the opposite: areas with higher Medicare spending tend to score worse on the quality of care provided to Medicare beneficiaries.”

In other words, we have a huge opportunity. If we reform Medicare so doctors and hospitals are rewarded for efficient, high-quality care, we can improve medical care and access for our seniors.

We can also save huge sums for taxpayers by eliminating waste in the system and by making sure that payments are aligned with the health outcomes we want to see.

Researchers at the Dartmouth Medical School recently studied the records of several million Medicare enrollees who had at least one of nine major severe chronic illnesses. They estimate that Medicare could have saved $50 billion over a five-year period treating those patients if all regions of the country practiced the same efficient care as the Mayo Clinic’s home region in Rochester.

And the CBO estimated that Medicare spending could drop by 29 percent if its high-cost and medium-cost regions matched the performance of its low-cost regions. That’s roughly $100 billion a year — real money by anyone’s standards.

Necessary changes

So, how do we achieve a Medicare system that rewards quality, efficient care?

• First, we need to increase incentives to reward doctors and hospitals that deliver high-quality care.

For many illnesses, the medical profession has widely accepted, practice guidelines that are grounded in scientific evidence and proven to result in better outcomes — such as when to give aspirin to heart patients and how often to perform cancer screenings — but they are not always followed. Medicare needs to reward doctors and hospitals for doing the right things and achieving improvement in care. These quality guidelines can be the basis for Medicare payments to providers.

• Second, Medicare should adopt a more patient-focused approach to payment.

Instead of paying for care on a piece-work basis — indiscriminately for any and all procedures — Medicare would pay for an episode of care just the way a patient experiences services.

So, for example, a doctor whose patient suffered a heart attack would be paid for the entire heart attack episode. This would encourage better care coordination and reduce incentives to bill Medicare purely for volume.

• Third, Medicare should encourage providers to educate patients about appropriate health care and health care choices and to reward doctors and hospitals who support patients in managing and being active partners in their own care. Studies show that educated patients are more efficient, healthier consumers of health care.

We must change Medicare to become a value purchaser: to pay providers for high quality, accessible, safe, and efficient care. We can do much better for America’s seniors, and for the doctors and hospitals who treat them, and for taxpayers. We must do better so that current beneficiaries and future generations can continue to rely on the strong protections that Medicare has traditionally provided for its beneficiaries.

Amy Klobuchar is Minnesota’s junior U.S. senator. Michele Kimball is Minnesota’s AARP state director.

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