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Public Statements

Hearing of the Senate Finance Committee - On Medicare Reimbursement System

Hearing

By:
Date:
Location: Washington, DC

Today during a Finance Committee hearing, U.S. Senator Maria Cantwell (D-WA) highlighted the need to reward efficiency in the Medicare reimbursement system. The current fee-for-service system often rewards practitioners for ordering redundant or unnecessary tests and procedures.

Cantwell authored the new Medicare reimbursement formula -- enacted into law in 2010 as part of the Affordable Care Act -- that rewards quality of care instead of quantity of services. Cantwell's "value-based index" is in the process of gradually being implemented, with full implementation by 2017.

The value-based index will particularly benefit Washington state patients and providers by ending Medicare's practice of paying more to high-cost states. The average yearly cost for a Medicare patient in Washington state before health care reform was $7,100, roughly $1,200 less than the national average, with thirty-four states having higher per-person Medicare costs than Washington.

This will help improve access to Medicare providers by finally rewarding Washington doctors for the low-cost, quality care they provide. This is especially important in Eastern Washington, where severe shortages exist. By 2025, Eastern Washington will have a shortage of about 640 doctors if current trends continue, according to Dr. Mark Doescher, Director, Center for Health Workforce Studies and WWAMI (Washington, Wyoming, Alaska, Montana, and Idaho) Rural Health Resource Center, University of Washington School of Medicine.

"When I think of Spokane, I think it's a great place and I certainly think that the population with the city title of "Near Nature, Near Perfect' is good symbolism, but I don't know that we're talking about healthier populations here. We're talking about healthier practices," Cantwell said to Dr. Glenn Stream, a Spokane physician and president of the American Academy of Family Physicians. Click here to watch an archived webcast video of Senator Cantwell's exchange with Dr. Stream. Cantwell comments start at about 81.33.

"Frankly, people in our region are very frustrated that we deliver care that way and get less reimbursement and less people want to go practice there. And somebody can go practice somewhere else where they can run up the bill to the American taxpayer," Cantwell continued. "But just to assume that they are healthier and that someplace else is sicker and we should just pay more is not going to work. …So if you have any comment on that Dr. Stream? …And [also on] what we need to do for graduate medical education to really get that workforce plugged in."

Dr. Stream responded: "We absolutely have to build a stronger primary care foundation if we're going to have any success improving the quality and cost-effectiveness of our healthcare system. And that really is this blended payment model that supports the patient-centered medical home model. Decreasing over time the importance of fee-for-service, having a meaningful care management fee that does this care coordination prevention and wellness."

"I would emphasize that decisions made that influence specialty payment have a huge influence on specialty selection of our medical students," Dr. Stream continued. "And currently a strong disincentive to people to choose primary care. And we have to narrow that income gap between primary care physicians and median sub-specialty income to have the impact we want."

Currently, Washington state produces the second-lowest count of medical school graduates per capita among all states, and the lowest count in the Pacific Northwest. Only 40 new medical students per year are trained in eastern Washington -- half in Spokane, half in Pullman. Eastern Washington imports more than 80 percent of its physicians from other states and countries.

During the health care debate in 2009, Cantwell worked to include measures that expand the number of medical students pursuing careers as primary care physicians. Primary care doctors can play a significant role in cutting health care costs by skillfully coordinating and overseeing patient care. However, the current system underpays these care-givers, making primary care an unattractive option for medical students and ultimately reducing patient access to necessary care.

The law's new measure expands training capacity for primary care physicians and includes incentives for medical students who opt for a career in primary care, increasing the availability of care, especially for those in rural and underserved communities.


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