Congress Proposes New Physician Payment System

by Sarah Varney
January 4, 2010

The health care overhaul bills on Capitol Hill do not upend traditional “fee for service” payment for doctors, but they do include financial incentives for doctors to cut medical costs and improve patient care.

Both the House and Senate bills include provisions to encourage the creation of accountable care organizations, or ACOs, as a way to test their viability. The ACO project would be limited to Medicare.

The idea is a pretty simple one: If all the doctors who take care of you — your primary care physician, any specialists and your hospital — worked together and their financial fates were somehow connected, almost like business partners, you’d get better care and it wouldn’t cost as much.

These affiliated provider groups could earn bonuses if they met or exceeded certain quality and cost targets for their Medicare patients.

An ACO is a bit like a building contractor. The contractor gets together with some other contractors — plumbers, electricians, roofers — and they agree to repair your house for a set amount of money.

If you’ve had a home repair that went sideways, this whole approach to managing health care may not inspire a lot of confidence. But there’s good evidence to suggest that physicians who have a financial stake in your medical costs are more efficient and more effective.

The article continues here.

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